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DOCUMENTS 
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1  »:riwi;rt  w'M 


REPORT 


UPON    THK 


FINANCES 


AND 


NTERNAL  IMPROVEMENTS 


OF   THK 


STATE  OF  NEW- YORK. 


1838 


REPRINTED  AT  BOSTONj 

BY   BUTTON  AND   WENTWORTH, 

NOS.   10  AND  12,  EXCHANGE  STREET. 


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STATE   OF    NEW-YORK. 


On  the  12th  of  March,  1838,  Me.  Samuel  B.  Rug- 
GLES,  Chairman  of  the  Committee  of  Ways  and 
Means,  of  the  Assembly  of  the  State  of  New-York^ 
submitted  to  the  House  the  following 

REPORT 

on  the  United  States  Deposite  Fund,  and  on  the 
recommendation  of  the  Comptroller  to  levy  a  direct 
tax. 

Mr.  Ruggles,  from  the  standing  committee  of 
ways  and  means,  to  whom  were  referred  so  much 
of  the  annual  message  of  his  excellency  the  Gov- 
ernor, as  relates  to  the  surplus  revenues  of  the 
United  States  deposited  with  this  State,  and  also 
the  annual  report  of  the  Comptroller,  upon  the 
finances,  begs  leave,  in  respect  to  that  portion  of 
the  message,  and  also  in  respect  to  that  portion  of 
the  Comptroller's  report  which  recommends  the 
imposition  of  a  direct  tax,  to  submit  the  following 
Report  : 

That  under  the  act   of  Congress,   passed  June 
28,  1836,  which  directed  the  surplus  moneys  in  the 


38259!^ 


treasury  of  the  United  States,  beyond  the  amount 
of  five  millions,  to  be  deposited  with  the  several 
States,  the  sum  of  $3,974,520  71  has  been  paid 
over  to  this  State,  being  three-fourths  of  the 
moneys  which  it  was  entitled  to  receive  under  that 
law.  By  virtue  of  the  subsequent  act  of  Congress, 
passed  October  2,  1837,  which  directed  the  trans- 
fer of  the  remaining  fourth  to  be  postponed  until 
the  first  day  of  January,  1839,  the  residue  of  those 
moneys,  amounting  to  $1,338,000,  has  hitherto 
been  withheld ;  and  whether  it  will  be  paid  at  the 
time  specified  in  that  act,  may  for  the  present  be 
regarded  as  doubtful.  Serious  differences  of  opin- 
ion have  prevailed  in  respect  to  the  expediency  of 
thus  depositing  the  surplus  revenue  with  the 
States  ;  and  if  the  sentiments  of  those  who  believe 
it  more  politic  for  the  federal  government  to  retain 
it,  shall  happen  to  prevail,  the  fourth  instalment 
may  possibly  be  permanently  withheld  from  this 
State. 

It  is  not,  however,  reasonably  to  be  anticipated, 
that  the  money  already  received  will  be  with- 
drawn. The  act  of  June  23,  1836,  w^hich  direct- 
ed the  deposite  to  be  made,  declared  that  when 
the  money,  or  any  part  of  it,  "  should  be  wanted 
by  the  Secretary  of  the  Treasury  of  the  United 
States  "  to  meet  appropriations  by  law,  it  should 
be  called  for  upon  certain  notice  mentioned  in  the 
act ;  but  the  subsequent  law  of  October  2,  1837, 
provided  that  the   amount   thus   deposited  should 


remain  with  the  States,  "  until  otherwise  directed 
by  Congress." 

It  cannot  be  deemed  probable,  that  a  majority 
of  the  States  represented  in  the  National  Con- 
gress, will  direct  the  withdrawal  of  these  moneys. 
Whatever  may  have  been  the  literal  provisions  of 
the  law,  directing  these  moneys  to  be  "  deposited  " 
with  the  States,  the  intention  of  those  who  passed 
it  evidently  was  to  secure  a  permanent  distribution, 
and  not  a  temporary  loan  of  the  surplus  revenues. 
In  fact  the  doctrine  on  that  subject,  as  it  was  first 
advanced  by  President  Jackson  himself,  plainly 
contemplated  an  irrevocable  appropriation.  In 
his  message  to  Congress,  in  1829,  he  declared 
that  "  the  most  safe,  just,  and  federal  disposition 
which  could  be  made  of  the  surplus  revenue,  would 
be  its  apportionment  among  the  several  States, 
according  to  their  ratio  of  representation  :" — and 
in  the  message  of  the  subsequent  year,  he  removed 
all  doubts  as  to  his  intention  in  that  respect,  by 
stating,  that  in  his  prior  message,  he  had  felt  it  to 
be  his  duty  "  to  recommend  the  adoption  of  some 
plan  for  the  distribution  of  the  surplus  funds  among 
the  States,  in  proportion  to  the  number  of  their 
representatives,  to  be  applied  by  them  for  objects 
of  internal  improvement." 

The  sentiments  thus  promulgated  at  Washing- 
ton, were  distinctly  responded  to  and  adopted  by 
the  Governor  of  this  State,  in  his  annual  message 


to  the  Legislature,  in  the  year  1830;  in  which, 
after  speaking  of  the  funds  to  be  derived  from  the 
surplus  revenue,  as  "  applicable  to  the  extension 
of  our  public  works,"  he  says  that  "  there  can  be 
no  valid  objection  to  the  distribution  of  the  surplus 
revenue  among  the  States,  to  be  disposed  of  at 
their  discretion."  The  same  chief  magistrate,  in 
the  succeeding  year  1831,  after  stating  that  one 
of  his  most  distinguished  predecessors  (Governor 
Clinton,)  had  alluded  to  the  same  subject  in  his 
message  in  1827,  renewed  the  suggestion  contain- 
ed in  his  former  communication  ;  and  pressed  it 
earnestly  upon  the  consideration  of  the  Legisla- 
ture. A  committee  of  the  Senate  in  the  same 
year,  reported  that  in  their  judgment,  the  proposed 
distribution  was  "  a  matter  of  the  first  importance;" 
and  for  the  reason,  among  others,  that  it  would 
enable  the  State,  in  prosecuting  her  works  of  inter- 
nal improvem.ent,  "  to  satisfy  the  just  claims  of  all 
her  citizens."  The  committee  fully  concur  in  the 
soundness  of  the  opinions  thus  expressed,  in  re- 
spect to  the  distribution  of  these  moneys  ;  and  in 
their  judgment,  the  receipt  by  this  State,  of  the 
large  sum  of  $'3,974,520  71  thus  allotted  to  it, 
whatever  may  be  the  opinions  of  those  who  doubt 
the  expediency  of  the  measure,  ought  to  be  a  sub- 
ject of  unmixed  congratulation. 

Without  pretending  to  question  the  obligation  of 
this  State  to  repay  the  money  thus  deposited,  when- 
ever  it  shall  be   legally  demanded  by  an    act    of 


Congress,  it  may  nevertheless,  be  assumed  that 
no  reasonable  probability  exists  that  it  will  ever  be 
thus  demanded.  Of  the  several  states  which  have 
received  their  respective  portions,  amounting  in  the 
aggregate  to  nearly  forty  millions  of  dollars,  the 
greater  number  have  already  appropriated  it  to  ob- 
jects of  a  permanent  nature,  from  which  it  cannot 
be  withdrawn  without  serious  injury  and  incon- 
venience. Many  of  the  States  have  expended  it 
in  works  of  internal  improvement,  or  in  paying 
debts  previously  incurred  for  that  purpose.-  In 
some  instances  it  has  been  loaned  to  their  citizens  ; 
while  one  example,  at  least,  is  presented,  in  which 
it  has  been  actually  distributed,  numerically,  among 
all  the  inhabitants  of  the  State.  In  nearly  all 
these  instances,  the  repayment  of  the  money,  if 
called  for  by  Congress,  will  become  inconvenient 
and  oppressive  to  the  people  of  those  States,  and 
can  only  be  made  by  incurring  a  debt  or  imposing 
burthensome  taxes.  Under  these  circumstances, 
therefore,  it  may  be  safely  predicted,  that  a  ma- 
jority of  the  representatives  of  the  States  and  of 
the  people  in  Congress,  will  hesitate  long  before 
they  consent  to  withdraw  from  the  States  the  mon- 
eys thus  distributed  ;  but  on  the  contrary,  that 
they  will  prefer  (in  case  it  should  be  found  neces- 
sary) to  replenish  the  treasury  by  temporary  loans 
in  anticipation  of  the  revenue. 

The  committee,  therefore,  wholly  dissent  from 
the  opinion  expressed  by  the  joint   committee  of 


8 

the  last  Legislature,  upon  the  subject  of  this  de- 
posite  fund,  that  the  pecuniary  means  which  it  has 
furnished  to  the  State,  should  be  regarded  as  mere- 
ly "  temporary,"  and  that  the  period  of  repayment 
is  "  not  far  remote."  On  the  contrary,  they  are 
well  satisfied,  that  the  sum  of  $3,974,520  71  thus 
acquired,  will  never  be  withdrawn  ;  and  they  re- 
commend, that  in  all  measures  of  legislation,  it 
should"  be  treated  as  a  portion  of  the  permanent 
property  of  the  State. 

The  amount  so  received,  has  been  loaned  under 
the  law  of  the  last  session,  upon  mortgage,  to  the 
citizens  of  this  State,  and  yields  a  nett  annual  in- 
come of  about  $250,000  ;  and  the  question  then 
arises — How  shall  that  income  be  appropriated  ? 

It  may  be  used  in  either  of  three  modes.  First, 
in  defraying  the  ordinary  expenses  of  supporting 
the  government  ;  or,  secondly,  in  paying  the  inter- 
est on  debts  created,  or  to  be  created,  for  works 
of  internal  improvement ;  or,  thirdly,  in  providing 
for  public  instruction,  and  the  diffusion  of  knowl- 
edge. 

It  is  not  the  province,  or  the  intention  of  the 
committee,  to  estimate  the  comparative  merits  of 
these  important  objects.  The  duty  of  providing 
adequately  for  the  education  of  the  people,  and 
that  of  furnishing  the  means  of  cheap  and  easy  in- 
tercourse between    the   different   sections  of  the 


9 

State,  are  equally  pressing  and  imperative.     If  the 
Legislature  should  be  satisfied,  however,  that  the 
State  possesses   other   resources    for  prosecuting, 
with  vigour  and  effect,  all  its  necessary  works  of 
internal  improvement,  no  question  need  arise  as  to 
the  propriety   of  appropriating  the   whole  of  this 
sum,  (large  as  it  may  be  deemed,)  to  the  gratify- 
ing office  of  diffusing  more  widely  the  blessings  of 
education.     But  before  such  an  appropriation  shall 
be  permanently  made,  it  ought  to  be  distinctly  un- 
derstood, that  the  other  means  of  the  State  are, 
and  will  continue  to  be,  entirely  sufficient  to  sat- 
isfy the  claims  of  that  large  portion  of  its  popula- 
tion, whose  welfare  is  depending  upon  the  proper 
extension  of  its  works   of  internal   improvement. 
The  original  intention  of  the  State,  in  procuring 
the  distribution  of  the  surplus  revenues,  evidently 
was  to  apply  its  portion  "  to  the  extension  of  our 
public  works  ;"  and  until  it  shall  be  satisfactorily 
ascertained,  that  this  great  duty  may  be  otherwise 
adequately   discharged,  it    may   well    be    doubted 
whether  these  funds  ought  to  be  wholly  appropria- 
ted to  any  other  object,  however  meritorious. 

It  is  believed  that  an  attentive  examination  of  the 
pecuniary  resources  of  the  State  will  satisfactorily 
demonstrate  its  ability  to  prosecute  and  extend  its 
system  of  public  works  on  the  most  liberal  scale, 
w  ithout  resorting  for  aid  to  the  fund  in  question  : 
and  the  investigation  of  this  point  has  occupied  the 
anxious  attention  of  the  committee. 

2 


10 


This  inquiry  necessarily  embraces  not   only  the 
present,  but  also  the  future  fiscal  condition  of  the 
State,  as  its  aspect  may  be  varied  from  time  to  time 
by  the  progress  of  the   public  works.     The  want 
of  a  definite  and  well-digested   system,  by  which 
to  prosecute  our  measures  of  internal  improvement 
in  regular    and    proper  succession,    increases  the 
difliculty  of  accurately  estimating   the   future  con- 
dition   of  the    treasury.     The   movements   of  the 
State,  for  the  last  few  years  at  least,  have  been  ir- 
regular  and  disconnected,   yielding  only  to  occa- 
sional impulses,  and  proceeding  without  much  plan 
or  method.     A  struggle  for  some   time  has  been 
going  on  between  the  friends  of  a  vigorous  system 
of  internal  improvements,  and  those  who  deny  its 
expediency  or  safety  ;   and  our  legislation  has  fluc- 
tuated according  to  the  prevalence  of  one  or  the 
other  of  these  contending  opinions.     It  is  not  ne- 
cessary or  desirable  to  enter  at  this  time  into  the 
particulars  of  this  controversy,  and  it  is  alluded  to 
only  to  explain  the  difficulty  which  it  occasions  in 
predicting,  with  that  precision  which  could  be  de- 
sired, the  future  movements  of  our  fiscal  system. 

In  order  to  comprehend  truly  the  present  situa- 
tion of  our  finances,  and  correctly  to  estimate  our 
future  progiess,  it  will  be  useful  to  revert  to  the 
condition  of  the  treasury  when  the  canal  policy 
was  commenced. 

Our    financial    history,  during    the  last   twenty 


11 


years,  is  indeed  replete  with  instruction.  Within 
that  eventful  period  we  behold  the  origin,  progress, 
and  final  success  of  those  great  measures  of  inter- 
nal improvement,  which  have  overcome  not  only 
the  barriers  of  nature,  but  the  more  formidable 
obstacles  of  prejudice,  incredulity,  and  error,  and 
which  are  destined,  in  the  latter  respect  at  least, 
to  achieve  victories  yet  more  signal. 

No    fact    in    all    that    history  is    more   striking 
than  the   remarkable  failure  of  our  distinguished 
men   adequately  to   estimate   the  pecuniary  value 
of  the   canals.     The   most  sanguine   anticipations 
of  the  most  enthusiastic  supporters  of  our  policy 
of  internal    improvement,    fell    far    short    of   the 
actual    results    which    that  policy  has  produced ; 
while    the   doubts    and    forebodings   of  its    oppo- 
nents,  are   remembered  only   as  curious  portions 
of  our  intellectual  history.     The  State  itself  seem- 
ed wholly  unconscious  of  its  latent  strength.     In 
the   present  plenitude  of  our  success,  the  fact  is 
hardly   credible,    and    yet    the   documents  of  the 
day   testify,  that  before   commencing   the   canals, 
the    Legislature    by    a    deliberate    act,    directed 
commissioners    to    solicit    pecuniary   donations   in 
aid  of  the  enterprise,  not  only  from   Connecticut 
and  Vermont,  but  even  from  the  States,  then  in 
their  infancy,  beyond  the  Alleghanies  :  and  so  far 
was  this   timid  and  discreditable  policy  pursued, 
that  the  very  preamble  to  the  law  of  1817,  which 
finally  directed  the  canals  to  be  commenced,  took 


12 

care  to  express  the  humble  hope,  that  the  States 
interested  in  the  work,  "  would  contribute  their 
full  proportion  of  the  expense." 

The  torrent  of  ridicule  and  obloquy  which  the 
canals  encountered,  during  the  first  few  years  of 
their  progress,  as  well  as  the  more  solemn  doubts 
of  some  of  our  ablest  statesmen,  will  long  be 
remembered.  Without  adverting  to  names  less 
distinguished,  it  needs  but  to  state  the  memorable 
fact  that  Mr.  Jefferson  pronounced  the  undertaking 
utterly  visionary  and  chimerical,  and  that  it  was 
"  at  least  a  century  in  advance  of  the  age."  Nor 
did  the  more  decided  friends  of  the  canals  appre- 
ciate in  any  just  degree,  their  pecuniary  value. 
In  the  year  1821,  four  years  after  they  had  been 
commenced,  the  Comptroller  of  the  State,  in  obe- 
dience to  a  resolution  of  the  Legislature,  prepared 
an  estimate  of  their  respective  revenues,  in  which 
he  stated,  that  for  the  ten  years  next  succeeding 
their  completion,  the  tolls  would  amount  annually 
to  one  hundred  and  fifty  thousand  dollars  !  The 
amount  which  was  actually  received  during  that 
period  often  years,  exceeded  ten  millions  of  dollars. 
Among  the  names  truly  illustrious  in  the  early  his- 
tory of  our  public  works,  few  are  more  distinguished 
than  that  of  Gouverneur  Morris.  His  compre- 
hensive intellect  and  ardent  temperament  enabled 
him  to  look  far  beyond  most  of  his  contemporaries 
into  the  rapidly  expanding  future  ;  and  yet  even  he 
fell  short  of  the  realities  which  the  Erie  canal  has 


13 


brought  within  our  view.  In  the  sini^ularly  elo- 
quent and  animated  memorial  by  which  his  fame 
is  forever  connected  with  that  great  work,  and  in 
which  he  endeavoured  to  enforce  upon  the  Legisla- 
ture the  importance  in  all  future  time  of  connecting 
the  Hudson  with  the  western  waters,  after  depict- 
ing the  wide  spread  region  around  our  inland 
seas,  and  its  capacity  to  supply  the  means  of  a 
great  and  profitable  commerce,  he  asked  whether 
it  would  be  deemed  extravagant  to  predict  that 
the  canal,  within  twenty  years,  "  would  annually 
bringdown  250,000  tons?"  The  actual  amount 
which  reached  the  tide  in  1838,  was  697,347  tons, 
or  nearly  three-fold  the  quantity  estimated  by  Mr. 
Morris  ;  and  the  total  tonnage  of  that  year,  ascend- 
ing and  descending,  exceeded  thirteen  hundred 
thousand  tons. 

The  tolls  of  the  canals  in  1824,  one  year  before 
their  completion,  were  s^340,000.  In  the  next 
year  they  reached  $566,000,  and  rose  in  1826  to 
§762,000,  With  the  rapid  progress  thus  strikingly 
exhibited,  few  of  our  citizens  were  inclined  to  believe 
that  the  canals  had  impoverished  the  treasury,  or 
that  they  would  prove  in  any  way  injurious  to  the 
pecuniary  interests  of  the  State.  The  subject 
was,  however,  presented  to  the  public  in  the  year 
1827  in  a  new  and  unexpected  light.  In  that  year, 
the  canal  committee  of  the  Senate,  of  which  Mr. 
Silas  Wright,  jr.,  was  chairman,  introduced  into 
that  body  a  report,  made  avowedly  for  the  purpose 


14 

of  drawing  the  attention  of  the  public  to  the  effect 
which  the  construction  of  the  canals  had  produced 
upon  the  finances  of  the  State,  and  of  generally 
diffusing  among  our  citizens  a  knowledge  of  the 
real  situation  of  the  public  funds.  It  announced 
that  "  an  alarming  change  had  taken  place  in  the 
public  funds" — that  the  school  fund  was  annually 
"  charsfins;  the  State  with  a  debt  of  $15,000"  — 
that  the  literature  fund  was  "  no  longer  able  to 
answer  the  calls  which  the  interests  of  education 
required  should  be  made  upon  it" — that  the  ac- 
tual income  of  the  canals  was  "  highly  exaggerated 
in  the  public  opinion" — that  their  gross  receipts 
for  the  year  1826,  without  any  deduction  for  ex- 
penses, were  but  |752,000,  and  paid  an  interest  of 
only  6  i",  per  cent,  on  their  total  cost  —  that  the 
debt  of  the  State  for  the  canals  then  made  or 
making  "would  more  probably  be  enlarged  than 
lessened  at  the  end  of  the  year" — that  "so  long 
as  it  thus  continued  to  increase,  its  final  payment 
was  not  even  approaching" — that  "  unless  assisted 
by  auxiliary  funds,  the  canals  would  not  pay  their 
own  interest  and  expenses,  and  redeem  their  debt 
within  any  reasonable  time,  if  they  would  ever  do 
^/" — that  "  the  debt,  with  the  whole  aid  of  those 
funds,  could  not  be  paid  off  in  a  great  number  of 
years  yet  to  come" — and  finally,  that  any  appro- 
priations by  the  State  for  the  purpose  of  construct- 
ing other  works,  unless  they  should  be  more  pro- 
ductive than  the  Erie  and  Champlain  canals,  would 
"hasten  the  period  when  direct  taxation  must  be 
resorted  to." 


15 


The   feeling   of  despondency  which   this    cele- 
brated document  produced   among  the  friends  of 
internal    improvement,  not  only  in  this  State,  but 
throughout    the   Union,  is  well  recollected  :    and 
3-et   it   is  somewhat  surprising,  that  an  intelligent 
and  sagacious  people,  should  have  permitted  them- 
solves  for   a  moment  to  be  misled  by  the  financial 
view   which  the  report  professed  to  take.     Its  fal- 
lacy was  obvious — consisting  in  the  total  omission 
to  take  into  the  account,  the  prospective,  but  cer- 
tain and  inevitable  increase   in  the  growth  of  the 
country,  and  the  trade  of  the  canals,  and  in  assum- 
ing  the   receipts   of  1826   as    an  immutable  basis. 
It  is  needless  to  add,  that  the  friends  of  internal 
improvement  made  a  resolute,   though  ineffectual 
struo;o:le  asfainst   the  doctrines   and  tendencies  of 
this   report.     The   late   Governor  Clinton,  on  the 
assembling  of  the  Legislature  in  the  year  1828, 
labored  earnestly   in   his  annual  message  to  disa- 
buse the  public  mind.     He  declared  that  "  the  real 
condition    of  the    finances  had   been  greatly  dis- 
coloured   and  misunderstood  by  inaccurate  views 
and  partial  examinations" — that  "  fallacious  state- 
ments had  been  mingled  with  the  subject" — that 
"  the    constant    and    progressive    increase   of   the 
canal  revenue,   and  the  correspondent  diminution 
of  the  debt,  would  in  a  few  years  produce  its  total 
extinguishment  " — that    "  the   elaborate   and  sys- 
tematic attempts  to  depreciate  the  utility  and  arrest 
the  progress  of  internal  improvements,  were  equall}' 
astonishing    and    mortifying" — that    "the    means 


16 


ol  the  State  were  ample,  her  resources  great,  and 
her  credit  equal  to  any  emergency,"  and  he  re- 
newed, "  in  the  most  earnest  manner,  his  recom- 
mendations in  favour  of  the  leading  objects  which 
he  had  presented  in  his  former  communications." 

The  death  of  this  great  man  in  February  of 
that  year,  withdrew  from  the  cause  of  internal 
improvement  its  ablest  champion,  and  the  loss  has 
been  severely  felt  by  the  people  of  this  State. 

The  predictions  of  his  last  message  as  to  the 
progressive  increase  of  the  tolls,  and  the  extin- 
guishment of  the  debt,  have  been  fully  realized. 
The  annual  tolls,  which  in  1826  were  $762,167, 
(or  according  to  the  statement  of  Mr.  Wright 
about  1752,000,)  amounted,  in  1833,  to  |1, 542, 695, 
although  the  rates  had  previously  been  reduced 
nearly  20  per  cent.  ;  and  in  the  year  1835,  to 
$1,485,775,  although  again  reduced  about  15  per 
cent. 

On  the  1st  day  of  July,  1836,  the  tolls  had  ac- 
cumulated in  the  hands  of  the  commissioners  to 
an  amount  sufficient  (with  the  aid  of  the  auxiliary 
funds  previously  realized  from  the  salt  and  auction 
duties)  to  extinguish  the  whole  of  the  outstanding 
debt.  Previously  to  that  time,  upwards  of  four  mil- 
lions of  dollars  had  been  paid  in  cash  directly  to  the 
public  creditors  ;  and  the  residue,  amounting  to 
between  three  and  four  millions,  was  then  invested 


17 


in    temporary    loans    by    the    Commissioners,    as 
trustees  for  the  holders  of  the  balance  of  the  debt. 

This  final  consummation  may  justly  be  regarded 
as  the  crowning  event  in  the  canal  policy  of  the 
State,  and  fixes  an  important  epoch  in  its  fiscal 
history.  It  affords,  moreover,  an  opportunity  pe- 
culiarly fitting,  not  only  to  review  the  progress  of 
our  treasury  since  the  commencement  of  our 
canals,  but  also  to  examine  how  far  the  view^  of 
the  finances  taken  by  the  committee  of  the  Senate, 
in  the  report  of  1827,  has  been  borne  out  by  the 
facts. 

In   the  year    1817,  when  the  canals  were  com- 
menced, the  funds  of  this  State  consisted  of, 

1.  Productive  property  in  bank  stocks,  mort- 
gages and  other  claims,  amounting  to,     .     .     .     §4,779,302  70 
The  State  then  owed  a  debt  of 1  ,.)0:3,fi85  00 

Leaving  a  balance  of 63,275,617  70 

Of  these  claims  a  portion  was  subsequently  dis- 
covered to  be  worthless  to  the  amount  of      ,  302,000  00 

Leaving, 82,973,617  70 

The  annual  income  of  this  balance 

was  about ^180,000  03 

The  Stite  derived  a  revenue  from 

auction  duties  of     ....         191,12333 

and  from  salt  duties  imposed  in 

that  yeir,  and  paying  in  1818,        48,784  27 

Miking  the  total  revenue      .      §419,9J7  65 

3 


18 


2.  Unproductive  property  in  lands  and  public 
buildings;  tlie  former  containing  about  a  million 
of  acres.  From  the  sales  of  thee  e  lands  a  fund 
had  been  previously  established  for  public  in- 
struction, called  the  "Common  School  Fund," 
the  principal  of  which,  on  the  1st  January,  1817, 
amounted  to 0982,242  2G 

The  Constitution  of  1821,  transferred  to  this 
fund  all  the  lands  then  remaining  unsold,  with 
some  unimportant  exceptions. 

Another  special  fund  had  also  been  established 
principally  for  the  support  of  academies,  called 
the  "  Literature  Fund,"  the  principal  of  which, 
on  the  1st  of  January,  1817,  amounted  to       .  $26,C9G  10 

By  an  act  passed  in  1826,  the  amount  of 
$2:33,616  19  wastaken  from  the  §*2,97;3,617  70 
above  mentioned,  and  transferred  to  the  Common 
School  and  Literature  Funds,  leaving     .     .     .     f2, 740, 001  51 


To  contradistinguish  this  amount  of  ^2,740,001 
51  from  the  two  special  funds  above  mentioned, 
it  was  designated  in  the  public  accounts  as  the 
"  General  Fund." 

When  the  canals  were  commenced  in  1817, 
another  special  fund  was  created  for  the  security 
of  the  public  creditors  of  whom  money  should  be 
borrowed  for  the  construction  of  the  canals,  desig- 
nated as  the  "  Canal  Fund,"  and  consisting  of  the 
salt  and  auction  duties  above  mentioned,  the  tolls 
to  be  received  from  the  canals  when  constructed, 
and  some  other  items  of  minor  amount. 

The   establishment    of  this    latter    fund   conse- 


19 


qusntly  diverted  from  the  ordinary  uses  of  the 
treasury,  the  salt  and  auction  duties,  amounting  to 
$239,937,  and  reduced  the  nett  income  of  the 
State  from  $419,907  65,  as  above  stated,  to  about 
$180,000  annually. 

A  tax  had  previously  been  laid  on  the  whole 
property  of  the  State,  to  defray  the  expenses  of 
the  war,  which  had  recently  terminated.  That 
tax  was  continued  at  a  reduced  rate,  until  the  year 
1823,  and  was  applied,  together  with  the  annual 
income  of  $180,000  above  mentioned,  to  the  pay- 
ment of  the  ordinary  expenses  of  the  government. 

In  1828,  the  rapid  increase  in  the  canal  tolls 
began  to  exhibit  itself  as  is  above  stated,  and  the 
State  tax  was  then  discontinued,  upon  the  ground 
that  the  principal  of  the  remaining  balance  of 
$2,740,001  51,  would  sustain  the  government  until 
the  debt  for  which  the  salt  and  auction  duties  and 
canal  tolls  were  pledged  should  be  extinguished, 
and  that  those  revenues  would  then  be  liberated 
and  placed  at  the  service  of  the  State. 

Between  that  time  and  the  year  1836,  the  whole 
of  that  balance  was  accordingly  expended,  princi- 
pally in  defraying  the  ordinary  expenses  of  the 
government,  amounting  to  .  .  $2,740,001  51 
and  the  State  also  borrowed  the 
bank  safety  fund,  amounting  to    .     .     416,532  43 


Making  in  all, $3,156,533  94 


20 


Of  this  amount,  a  portion  exceeding  J^'500,000  was 
expended  in  erecting  the  State  Hall  and  the  State 
Prisons. 

The  a2:2:re£fate  amount  of  the  salt  and  auction 
duties  which  were  received,  between  the  years 
1817  and  1836,  by  the  Commissioners  of  the  Canal 
Fund,  and  paid  over  to  the  public  creditors,  and 
which,  if  they  had  not  been  so  applied,  would  have 
been  used  during  that  time  for  the  ordinary  pur- 
poses of  the  government,  exceeds  §5,000,000  ;  so 
that  although  the  above  sum  of  §3,156,533  94  was 
thus  expended,  the  salt  and  auction  duties  remain 
to  the  amount  of  the  §5,000,000  virtually  invested 
in  the  canals,  and  stand  as  a  substitute  for  the 
§3,156,533  94. 

In  the  year  1832,  in  order  to  extinguish  a  claim 
of  John  Jacob  Astor  to  hinds  in  Putnam  county, 
sold  by  the  State,  and  the  title  to  which  had 
proved  defective,  a  debt  was  created  called  the 
Astor  Stock,  to  the  amount  of  §561,000. 

Since  the  year  1825,  the  State  has  also  created 
debts  in  constructing  lateral  canals,  which  remain 
outstanding,  viz  : 

For  the  Oswego  canal,        §421,304 

Cayuga  and  Seneca, 237, COO 

Chemung, 3I(),000 

Crooked  Lake, 120,000 

Chenango, 2,270,000 

3,364,304 


21 

And  it  has  commenced  the  construction  of  the  Black 
llivor  cuial  and  the  G'caasee  Valley  canal,  and 
created  debts  on  those  accounts,  lor       ....  ]9D,920 


Making  the  total  existing  debt  for  lateral  canals,     $3,o55,224 


Between  the  years  1817  and  1837,  the  Common 
School  Fund  was  increased  from  .^982,242  26  to 
$1,916,647  68,  and  the  Literature  Fund  from 
126,696  10  to  $268,092  87. 

On  the  first  of  January,  1837,  the  productive 
property  of  the  State  consisted  of  the  canals  : — 
which  produced  a  nett  revenue  in  the  year  1836, 
(after  deducting  all  expenses  of  collection,  and 
of  maintenance  and  repairs,)  of  §1,107,871  30; 
equivalent  to  an  annual  income  at  5  per  cent,  on  a 
principal  of        $22,157,742 

The  debts  of  the  State  now  are  : 

To  the  Bank  Fund, $416,o32 

The  Astor  debt, 561,000 

For  the  lateral  canals,      ....     3,55.5,224 

$4,532,756 

Which,  deducted  from  the  productive  property 

as  above,  leaves  a  balance  of $17,624,986 


The  income  of  the  State  may  then  be  estimated 
as  follows  : 


22 


Nett  revenue  from  the  canals  as  above,        .     .     $1,107,871  30 

The  revenue  of  183C  is  assumed  in  this  esti- 
mate, for  the  reason  that  the  tolls  of  J 837  were 
reduced   by   accidental  and   temporary  causes. 
The  auction  duties,  which  produced  in  1837,     .        214,458  C2 
The  salt  duties,  do.  .        111,516  89 

Total, §1,413,846  81 

From  which  deduct  interest    on    the    debt    of 

§4,532,756  65, S226,662  83 

There  remains,         ....     $1,187,183  98 
The  ordinary  expenses  of  the  government  are 

estimated  at 400,000  00 


Leaving  a  clear   annual  surplus  revenue  of    8787,183  98 


It  thus  appears  that  in  the  twenty  years  from 
1817  to  1837,  the  productive  property  of  the  State 
was  increased  from  $2,973,617  to  $22,157,742, 
(or  after  deducting  the  debt,  $17,624,986)  ;  the 
annual  revenue,  from  $419,907  to  $1,413,846  ; 
that  during  the  same  period,  $500,000  was  ex- 
pended upon  the  public  buildings  ;  that  the  school 
and  literature  funds  were  doubled  ;  the  State  tax 
discontinued,  and  the  people  relieved  from  burthen 
or  expense  in  supporting  the  government. 

It  would  naturally  be  supposed,  that  the  signal 
success  which  has  attended  the  prosecution  of 
our  canal  policy,  would  have  removed  all  oppo- 
sition to  the  extension  of  a  system  which  has  pro- 
duced such  prosperous  and  profitable  results  :  and 


23 

yet  there  are  still  to  be  found  within  this  State, 
individuals    of    respectability    and    influence    who 
zealously  maintain  that  the  treasury  has  been  im- 
poverished and   exhausted  by  our   public  works  : 
that    the    extension    of   the    system   will    impose 
grievous  and  everlasting   burthens  upon  the  peo- 
ple : — and  that  "  internal  improvement,"  (in  the 
often  repeated  phrase  of  a  distinguished  advocate 
of   these    opinions,)    "is    but    another    name    for 
eternal  taxation."     Upon  what  ground  this  strange 
doctrine  rests,  is  really  not  easy  to  discover.     The 
State,  within  the  last  twenty  years,  has  quadrupled 
its  productive  property  ;   relieved  its  citizens  from 
taxation,  and  now  enjoys   a  clear   annual   revenue 
of  nearly   eight    hundred    thousand    dollars  ;   and 
how,  under  these  circumstances,  its  treasury  can  be 
regarded  as  impoverished  or  exhausted,  is  wholly 
beyond  the  comprehension  of  the  committee.     The 
supporters   of  this  doctrine,  however,  allege  that 
the  "  General  Fund"  is  squandered,  and  gone  ;  — 
that  the  State  has  no  other  fund   to  which  it  can 
legally  resort  ; — and,  therefore,  that  the  treasury 
is  exhausted,  and  taxation  has   become  necessary. 
But    neither  of  these    propositions   is   founded  in 
fact.     The   General   Fund  is    neither   squandered 
nor  gone,  but  now  exists  in  full  vigour,  invested  in 
the  canals,  and  in  that  shape  yields  an  ample  reve- 
nue to   the  treasury  ;   and  it  is  no  more   lost  than 
the  seed  is  lost,  which,  when  sown,  produces  an 
abundant  harvest.     The  treasury,  in  fact,  is  over- 
flowing with    the  tolls  derived  from  the  canals  ; 


24 


and  to  those  tolls  the  state  may  now  legally  and  pro- 
perly resort,  for  the  purpose,  not  only  of  meeting 
all  its  present  obligations,  but  of  extending  the 
benefits  of  internal  improvement  to  those  hitherto 
neglected  portions  of  its  population,  at  whose 
common  risk,  and  upon  whose  common  credit, 
the  canals  were  constructed. 

But  it  has  been  contended  that  these  revenues 
are  placed  "wholly  beyond  the  reach"  of  the 
representatives  of  the  people  :  and  upon  the  ground 
that  the  ICth  clause  of  the  seventh  section  of  the 
Constitution  of  1821,  has  declared  that  the  tolls 
shall  not  be  "reduced  or  diverted  "  at  any  time 
before  the  "full  and  complete  payment"  of  the 
moneys  borrowed  for  the  construction  of  the  Erie 
and  Champlain  canals  :  and  it  is  averred,  that  in 
point  of  fact,  those  moneys  have  not  been  fully 
and  completely  paid,  according  to  the  literal  re- 
quirements of  that  clause. 

This  objection,  it  will  be  perceived,  if  well 
founded,  will  apply  equally  to  the  reduction,  as  to 
the  diversion  of  the  tolls  and  as  it  involves  in 
both  respects  important  consequences,  it  deserves 
attention. 

The  Convention  which  framed  the  amended 
constitution  assembled  in  the  year  1821,  and  only 
a  few  months  after  the  comptroller  had  estimated 
that  the  tolls  of  the  canals  for  the  ten  years  next 


25 


after  their  completion  would  be  only  one  hundred 
and  fifty  thousand  dollars  annually.  From  pecu- 
liar causes,  not  necessary  now  to  state,  a  large 
majority  of  that  body  participated  in  the  doubts 
and  forebodings  as  to  the  eventual  success  of  the 
canals,  which  then  prevailed  with  a  considerable 
party  throughout  the  State  ;  and  there  is  good  rea- 
son to  believe  that  many  of  its  leading  members  hon- 
estly feared,  that  the  debt  to  be  incurred  in  con- 
structing those  works  would  never  be  paid  ;  and 
that  if  the  tolls  should  be  reduced  or  diverted,  a 
perpetual  tax  to  pay  the  interest  would  be  imposed 
upon  the  people.  It  was  mainly  under  the  influ- 
ence of  this  apprehension,  and  far  less,  if  at  all, 
for  the  purpose  of  affording  a  specific  pledge  to 
the  public  creditor,  that  the  clause  in  question  was 
inserted  in  the  constitution. 

The  total  amount  borrowed  to  construct  the 
canals,  was  $7,672,782,  of  which  amount  .|5,326,- 
295  has  since  been  paid  directly  to  the  public 
creditors,  and  certificates  of  stock  have  been  can- 
celled to  that  extent.  The  duty  of  receiving  the 
money  and  holding  it  for  the  creditors,  is  by  law 
entrusted  to  the  board  of  Commissioners  of  the 
canal  fund ;  and  that  body  stands  between  the 
State  and  its  creditors,  acting  at  the  same  time  as 
agents  of  the  State  and  trustees  for  the  creditors. 
The  Commissioners  have  discharged  their  duty  so 
far  as  to  receive  from  the  State  "  full  and  complete 
payment  "  of  the  debt ;   and  they  are  now  engaged 

4 


26 


in  executing  the  remainder  of  their  trust,  by  paying 
the  money  to  the  creditors.     They  have  repeatedly 
notified  those  creditors  by  public  advertisements, 
both  in  this  country  and  in  Europe,  and  also  by 
written  circulars  whenever  their  residence  could 
be  discovered,  that  they  had  received  the  money, 
and  were  prepared  to  pay  it  ;   but  as  the  debt,  ac- 
cording to  the  terms  of  the  loan,  does  not  fall  due 
until  1845,  the  Commissioners,  in  order  to  avoid 
the  responsibility  incurred  in  keeping  so  large  an 
amount  permanently  invested,  have   offered  large 
premiums  to  the  creditors  to  come  forward  and  re- 
ceive payment  and  surrender  their  certificates.   The 
Commissioners  have  thus  reduced   the  amount  to 
12,346,487  ;   so  that  little  more  than  two-sevenths 
of  the  original  sum  now  remains  unpaid.     As  a  con- 
siderable portion  of  this  remnant  of  the  debt  is  held 
by  persons  residing  in  foreign  countries,  it  is  not  im- 
probable that  some  of  them  may  neglect  or  refuse  to 
receive  payment  until  the  year  1845,  and  the  money 
must  consequently  remain  at   least  until  that  time 
invested  for  their  benefit  in  the  hands  of  the  Com- 
missioners. It  will  be  perceived,  that  whatever  force 
there  may  be  in  this  constitutional  objection,  will 
not  be  diminished  by  the  payment  of  any  portion 
of  the  debt,  however  large  ;   so  that  whether  five- 
sevenths   or   ninety-nine-hundredths    of  the    debt 
should  be  paid,  the  position  would  not  be  varied. 
The  pledge  can  only  be  literally  performed  by  pay- 
ing the  last  remaining  dollar  to  the  last  remaining 
creditor.     No  middle  ground  exists  between  this 
extreme  consequence   and    the    position   that  the 


27 

pledge  is  satisfied  for  all  fair  and  practical  purpo- 
ses, when  the  amount  of  the  debt  is  paid  over  to 
the  Commissioners  and  safely  invested  by  them  in 
trust  for  the  creditors. 

It  is  under  these  circumstances  that  the  doctrine 
is  advanced,  not  on  the  part  of  the  holders  of  this 
remnant  of  the  debt,  (for  it  is  believed  that  they 
are  wholly  indifferent  as  to  the  matter,)  but  by 
those  who  seek  to  arrest  the  progress  of  our  public 
works,  that  the  canal  tolls  shall  not  be  reduced  or 
diverted  until  the  last  dollar  shall  be  literally  paid 
to  the  creditor.  That  no  matter  how  important 
it  may  become  to  our  commerce  and  general  inte- 
rests to  revise  and  regulate  the  rates  of  toll  ;  that 
no  matter  how  just  or  pressing  may  be  the  claims 
of  other  parts  of  the  State  for  works  of  internal 
improvement  ;  the  canal  tolls  shall  be  held  "be- 
yond the  reach  of  the  Legislature  ;"  at  least  until 
the  year  1845,  when  interest  ceasing  on  the  debt, 
the  creditor  may  probably  be  W'illing  to  receive  pay- 
ment : — and  the  doctrine  involves  this  monstrous 
consequence,  that  the  whole  accumulating  amount 
of  the  tolls,  which  with  the  compounding  interest, 
would  produce,  by  the  year  1845,  at  least  ten  mil- 
lion of  dollars,  must  be  kept  invested  in  money 
as  a  farther  pledge  for  the  payment  of  a  sum  of  two 
millions,  and  which  very  two  millions  already 
exists  in  money  invested  on  safe  security  ;  and 
that  in  the  mean  time  the  public  improvements  of 
the  State    must    be    deferred,    and    direct     taxes 


28 


imposed    to  defray  the   ordinary  expenses   of  the 
government  ! 

In  the  judgment  of  the  committee  no  such 
absurdity  was  contemplated  by  the  framers  of  the 
Constitution,  or  could  ever  be  submitted  to  by  the 
people.  The  clause  in  question  evidently  was 
intended  merely  as  a  guaranty,  not  so  much  to 
the  public  creditors  as  to  the  people  of  the  State 
at  large,  that  a  sum  should  be  raised  from  the 
tolls  and  other  revenues  pledged,  sufficient  to  sat- 
isfy the  debt,  and  provide  against  the  hazard  of 
taxation  for  that  purpose.  And  this  was  all  its 
object.  It  w^as  never  dreamed  that  ten  millions 
should  be  accumulated  in  order  to  pay  two  millions. 
The  restriction  was  adopted  upon  the  mistaken 
calculation  that  the  revenue  would  not  more  than 
pay  the  debt  as  fast  as  it  became  due.  Time  has 
disclosed  that  error.  The  money  is  raised  and 
ready,  and  upon  every  sound  and  rational  principle 
of  construction  the  pledge  is  satisfied.  The  State 
has  done  all  that  the  most  scrupulous  good  faith 
could  require,  and  no  reason  exists  why  the  tolls 
which  are  thus  redeemed  and  unfettered,  should 
not  be  regulated  or  reduced  in  such  manner  as 
the  Legislature  shall  think  fit,  or  applied  to  any 
beneficial  purpose  which  the  public  interests  may 
require. 

And  in  this  light  the  question  has  been  viewed 
by  the  representatives  of  the  people.     By  the  act 


29 


of  May  11,  1835,  the  Legislature  directed  that  the 
canal  tolls  should  be  expended  in  enlarging  the 
Erie  Canal  to  such  dimensions  as  the  Canal  Board 
should  determine,  who  were  thereby  also  author- 
ized to  construct  an  "  independent  canal,"  in  such 
parts  of  the  route  as  they  thould  think  expedient. 
The  canal,  according  to  the  plan  since  adopted 
by  the  Board,  will  be  about  three  times  as  large  in 
volume  as  the  existing  canal,  and  its  location  will 
be  changed  for  several  miles  of  the  route.  The 
Revised  Statutes,  in  1830,  had  explicitly  declared 
the  Erie  and  Champlain  canals  to  be  completed  : 
so  that  both  legally  and  practically,  the  canal  thus 
altered  in  dimensions  and  in  location,  may  be  con- 
sidered as  a  new  work.  The  tolls  expended  in 
its  enlargement,  to  all  technical  intents,  are  as 
much  "  diverted,"  as  if  employed  in  constructing 
a  lateral  canal  or  any  other  of  the  public  works  of 
the  State  ;  and  the  consequences,  so  far  as  the 
public  creditors  or  the  people  of  the  State  at  large 
are  concerned,  are  in  no  respect  different. 

But  the  9th  section  of  the  act  placed  the  inten- 
tion of  the  Legislature  beyond  all  doubt  :  for  it 
directed  that  the  expenditures  in  thus  enlarging 
the  canal  "should  be  so  limited  as  to  leave  from 
the  canal  revenues  an  annual  income  to  the  State 
of  at  least  pOO,000."  In  other  words,  the  Legis- 
lature appropriated  that  amount  of  the  canal  tolls 
to  the  ordinary  uses  of  the  government. 

By   a    subsequent    act,   passed    May   16,    1836, 


30 


the  Legislature  increased  this  annual  sum  from 
$300,000  to  $400,000  :  but  possibly  for  the  pur- 
pose of  quieting  constitutional  scruples,  the  phrase- 
ology of  that  law  directed  the  Commissioners 
of  the  Canal  Fund  to  "loan"  that  sum  annually 
"  to  the  treasury  of  this  State,  for  the  use  and 
benefit  of  the  General  Fund  ;"  and  the  Comptroller 
was  directed  to  charge  the  General  Fund  "  as  a 
debtor,"  for  such  loan  to  the  Canal  Fund.  It  is 
rather  to  be  regretted  that  it  should  have  been 
thought  proper  or  necessary  to  throw  the  transac- 
tion into  this  form.  If  the  State  owned  the  tolls 
free  from  the  encumbrance  of  the  public  creditor, 
no  necessity  existed  for  this  legislative  fiction.  If 
it  did  not,  the  propriety  of  abstracting  the  tolls, 
under  the  guise  of  a  loan  to  the  General  Fund, 
(which  fund  existed  only  in  the  canals  themselves) 
may  well  be  questioned  :  while  the  very  fact  of 
charging  the  State,  or  the  General  Fund,  "  as  a 
debtor,"  for  the  amount  of  the  tolls,  was  calculated 
needlessly  to  perplex  the  public  mind  in  regard  to 
the  true  state  of  the  finances. 

It  is  therefore  quite  evident  that  the  tolls  of  the 
canals  have  been  brought  fully  within  the  reach  of 
the  Legislature  :  and  the  very  important  question 
then  arises,  in  what  mode  shall  they  be  appropri- 
ated so  as  most  effectually  to  promote  the  progress 
of  the  public  works  ? 

By  the   acts   of  1835  and   1836,  the  tolls,  after 


31 


deducting  8400,000  annually,  (and  of  which  sum 
about  one  half  is  applied  in  paying  the  interest 
on  the  debt  for  lateral  canals,)  have  been  appro- 
priated to  the  enlargement  of  the  Erie  canal.  The 
cost  of  that  enterprise,  originally  estimated  at 
S12,000,000,  will  not  probably  fall  short  of 
115,000,000  :  so  that  if  only  the  nett  revenues 
(now  amounting  as  it  is  above  shown,  to  8787,183,) 
shall  be  applied  to  that  purpose,  the  work  cannot 
be  completed  short  of  twenty  years  :  and  during 
the  whole  of  that  time  those  other  works  must  be 
deferred,  which  could  be  aided  by  this  revenue 
in  case  a  proper  scheme  of  finance  were  to  be 
adopted. 

The  policy  and  the  plan  of  enlarging  the  canal, 
have  been  definitely  settled  by  the  constituted  au- 
thorities, and  after  mature  consideration.  Expendi- 
tures have  already  been  incurred  in  prosecuting  the 
work  to  an  amount  exceeding  8600,000,  and  con- 
tracts have  been  made  in  addition  to  the  extent  of 
nearly  three  millions.  The  idea  of  abandoning  the 
undertaking,  even  if  it  were  desirable,  is  therefore 
quite  out  of  the  question.  The  committee  are  more- 
over satisfied,  that  the  speedy  enlargement  of  the 
canal  is  required  by  the  best  interests,  not  only  of 
the  inhabitants  in  its  immediate  vicinity,  but  of  the 
people  of  every  part  of  the  State.  The  Canal 
Commissioners  in  their  recent  report  to  the  Legis- 
lature, have  estimated  its  annual  tolls  within  a  few 
years   after  it   shall  be  completed,  at  no  less  than 


32 


three  millions  of  dollars,  equivalent  to  an  annual 
income  of  five  per  cent,  on  a  capital  of  sixty  mil- 
lions, and  that  of  this  large  revenue  at  least  one 
half  will  be  paid  upon  property  passing  to  and  from 
other  States.  It  is  quite  evident  that  such  an  in- 
come will  enable  the  State,  after  making  the  most 
judicious  revision  of  the  rates  of  toll,  to  extend  its 
fostering  aid  to  every  portion  of  its  territory,  how- 
ever remote  or  sequestered.  To  secure  such  a 
result  w^ith  the  least  practicable  delay,  is  therefore 
an  object  of  general  importance. 

The  canal,  when  enlarged,  will  be  greatly  in- 
creased in  value  and  power,  and  in  point  of  magni- 
tude will  be  one  of  the  most  important  works,  not 
only  of  this  country,  but  of  the  age.  Its  capacity 
exceeding  that  of  the  present  canal,  at  least  seven 
fold — being  seven  feet  deep  and  seventy  feet 
wide,  with  double  locks  of  enlarged  dimensions 
throughout  the  whole  line, — it  will  furnish  the 
means  of  convenient  transit  for  not  less  than  ten 
millions  of  tons  annually.  The  supply  of  water 
will  be  abundant  and  unfailing,  and  the  enlarged 
size  of  the  boats  by  which  it  will  be  navigated,  will 
reduce  the  cost  of  transportation  nearly  one  half; 
so  that  if  the  tolls  should  even  be  retained  at  their 
present  rates,  the  saving  to  the  community  in  the 
aggregate  expense  of  conveyance,  would  be  from 
one-fourth  to  one-third  of  the  amount  now^  paid. 
It  must  be  borne  in  mind  however,  that  to  effect 
this   saving,    the  enlargement  must  be   completed 


33 


throughout  the  whole  line,  so  as  to  avoid  the 
expense  and  delay  of  trans-shipment, — and  from 
this  fact  it  will  be  obvious,  that  important  financial 
consequences  are  involved  in  its  speedy  prosecu- 
tion. By  proper  efforts  the  enlargement  may  be 
completed  and  made  available  within  five  years. 
At  the  expiration  of  that  period,  the  interest,  at 
five  per  cent.,  compounded  half-yearly,  on  the  cost 
of  the  work,  (estimating  it  at  fifteen  millions,)  will 
amount  to  about  two  millions  and  a  half  of  dollars  ; 
whereas,  if  the  completion  shall  be  delayed  twenty 
years,  the  intervening  interest  alone  will  exceed 
nine  millions  ;  showing  a  loss  of  interest  by  pro- 
ceeding at  the  present  sluggish  rate,  of  at  least  six 
and  a  half  millions  of  dollars  ;  a  sum  which  of 
itself  would  go  far  to  extend  the  benefits  of  in- 
ternal improvement  to  every  other  section  of  the 
State. 

In  order  thus  to  expedite  the  work,  it  will  become 
necessary  to  borrow  money  and  incur  a  temporary 
debt.  That  this  suggestion  will  alarm  those  who 
regard  a  public  debt  as  the  greatest  of  all  public  ca- 
lamities, is  not  improbable  ;  and  it  may  very  pos- 
sibly arouse  opposition,  as  violent  as  that  which 
was  arrayed  against  our  canals  in  their  early  stages. 
The  hope  is  however  indulged,  that  the  successful 
example  furnished  by  that  great  experiment  will 
dispel  any  groundless  fears,  and  impart  to  our 
public  councils  that  degree  of  moral  courage  which 
the  occasion  requires. 
5 


34 


Our  fathers  did  not  hesitate  to  encounter  debt, 
even  when  the  means  of  paying  the   interest  were 
unascertained  and  contingent  ;   and  surely  we  may 
venture  upon  a  similar  effort,  now  that  we  are  certain 
that  the  revenues  of  the  State  will  suffice  to  pay  the 
interest.     The  present  nett  annual  revenue  of  the 
State,  after  paying  its  expenses  and  the  interest  on 
its  debt,  is  ^^787, 183,  as  above  stated.     That  sum 
alone  will  pay  the  annual  interest,  at  five  per  cent, 
on  $15,743,660  ;   and  that  amount  may  therefore 
be  borrowed  and  expended,  and  the  interest  punc- 
tually  met  without   taxation.     Any  augmentation 
wdiich  shall  be  experienced  (either  by  means  of 
the   expenditure  of  that  sum,  or  from   any  other 
cause)  in  the  revenue  of  the  canals,  will  itself  in- 
crease to  a  corresponding  extent  the  ability  of  the 
State  further  to  borrow  and  pay  the  interest.     It  is 
evident  that  every  $500,000  of  revenue  will  serve 
as  a  basis    of  finance    to    sustain  ten  millions  of 
debt.     If  the  estimate  of  the  Canal  Commissioners 
is    correct,    (and    from  their  well  known  caution 
their  opinions  in  this   respect  are  peculiarly  enti- 
tled to  confidence,)  that  the  enlarged   Erie  Canal 
will   yield  an    annual    revenue  of  three   millions, 
equivalent  to  five  per  cent,  on  sixty  millions,  it  will 
at  once  be  obvious  that  a  sum  of  thirty  millions  may 
not  only  be  borrowed,  and  expended,   but  wholly 
reimbursed,  within  twenty  years  ;     or   that    forty 
millions  may  be  so  borrow^ed,  expended,  and  re- 
imbursed,  in  twenty-eight  years. 


35 


Nor  need  it  be  apprehended,  that  in  order  to 
produce  these  immense  results,  the  tolls  of  the 
canals  must  be  maintained  at  oppressive  or  injuri- 
ous rates.  During  the  years  1833,  1834  and  1835, 
the  rates  were  reduced  in  the  aggregate  about  35 
per  cent.,  and  yet  during  these  three  years  the 
tolls  amounted  to  ^^4, 209, 000  ;  whereas  in  the 
three  years  next  preceding  the  reduction  they  had 
amounted  to  only  83,185,000,  exhibiting  an  in- 
crease of  upwards  of  a  million  of  dollars.  The 
responsible  duty  of  regulating  the  tolls  to  be  im- 
posed upon  the  great  and  almost  illimitable  trade 
which  our  canals  are  to  enjoy,  and  of  fixing  the 
rates  so  judiciously  as  best  to  promote  our  com- 
mercial and  agricultural  prosperity,  and  at  the  same 
time  adequately  to  strengthen  our  fiscal  resources, 
will  undoubtedly  be  exercised  with  that  prudence, 
liberality,  and  forecast,  which  the  magnitude  of  the 
subject  demands.  Whatever  rates  of  revenue  may 
be  eventually  adopted,  we  may  safely  assume  that 
the  State  will  take  care  to  reserve  such  an  amount 
in  the  a2:gre2:ate  as  the  interests  of  its  treasury  and 
the  general  welfare  of  its  citizens  shall  require. 

The  committee,  therefore,  have  no  hesitation  in 
recommending  that  the  State  proceed  promptly  to 
borrow  such  moneys  as  are  needed  to  prosecute 
most  vigorously  its  public  works  ;  and  in  lieu  of 
appropriating  the  revenue  only  of  the  present 
canals  for  the  purpose  of  making  such  expendi- 
tures as  the  general  interests  require,  they  would 


36 


suggest  that  the  State  should  retain  that  revenue 
as  a  sinking  fund  to  pay  the  interest  on  all  moneys 
it  may  borrow,  from  time  to  time,  to  prosecute 
and  perfect  a  liberal  system  of  internal  improve- 
ment. 

It  is  not  the  appropriate  duty  of  the  present  com- 
mittee to  point  out  those  particular  works  which 
stand  most  in  need  of  the  efforts  or  the  fostering  care 
of  the  State.  That  gratifying  office  will  devolve 
upon  those  by  wdiom  it  will  doubtless  be  faithfully 
and  wisely  discharged.  The  view  which  they 
have  sought  to  take,  is  purely  fiscal  in  its  nature  : 
aiming  only  to  demonstrate  the  pecuniary  ability 
of  the  State  to  proceed  promptly  and  liberally  in 
the  great  work  of  improving  its  internal  condition 
and  developing  its  resources.  They  confidently 
believe,  that  the  success  hitherto  attained  in  the 
prosecution  of  our  system  of  internal  improvement 
is  but  the  precursor  of  triumphs  far  more  im- 
portant ;  that  the  results  we  now  enjoy  but  faintly 
shadow  forth  the  vast  realities  which  are  within 
our  reach  ;  and  that  it  needs  but  to  employ  promptly 
and  vigorously  our  resources  to  augment  yet  more 
fully  and  gloriously  the  power  and  prosperity  of 
the  State.  Without  trespassing  upon  the  province 
of  those  whose  duty  it  is  to  prescribe  the  par- 
ticular details  of  those  great  measures  of  policy, 
by  w^hich  our  dormant  energies  may  thus  be  roused 
into  salutary  and  profitable  action,  the  committee 
would  observe  generally,  that  the  w^orks  which  for 


37 


the  next  few  years  will  occupy  the  attention  of  our 
public  authorities,  are, 

1.  The  rail-roads  connecting  the  distant  extrem- 
ities of  the  State,  and  the  interior  portions  with 
each  other. 

2.  The  Erie  canal  with  its  various  tributaries. 

On  the  subject  of  the  policy  to  be  pursued  by 
the  State  in  regard  to  the  construction  of  rail- 
roads, differences  of  opinion  exist. 

On  the  one  hand  it  is  contended,  that  these 
great  avenues  of  travel  and  communication  which 
affect  so  intimately  the  convenience  and  welfare 
of  all  our  people,  should  be  constructed  and  man- 
aged exclusively  by  public  agents  acting  under 
public  authority  ;  and  the  success  of  those  gov- 
ernments which  have  pursued  that  policy,  not  only 
in  cheapening  the  cost  of  transport,  but  in  avoiding 
the  mischiefs  of  monopoly  has  been  adduced  as  a 
reason  why  the  State  should  possess,  and  at  all 
times  regulate,  this  important  branch  of  our  internal 
improvements. 

On  the  other  hand  it  has  been  urged,  that  the 
employment  of  the  great  number  of  persons  re- 
quired to  conduct  the  manifold  details  of  these 
crowded  channels  of  transportation,  would  throw 
into  the   hands   of  the  State,  an  undue  amount  of 


38 


power  and  patronage  :  and  it  is  alleged  that  this 
danger  will  be  avoided,  and  the  public  conve- 
nience in  other  respects  promoted,  by  entrusting 
their  management  to  companies  of  individuals  duly 
incorporated.  It  is  also  contended,  and  especially 
by  those  who  are  habitually  sceptical  as  to  the  suc- 
cess of  our  public  works,  that  the  value  of  rail-roads 
has  not  yet  been  sufficiently  tested,  and  that  they 
will  eventually  fail  to  yield  results  sufficiently  pro- 
fitable to  render  it  desirable  for  the  State  to  con- 
struct them  at  the  public  expense. 

The  State  has  declined,  hitherto,  to  construct 
rail-roads  on  its  own  account,  but  has  preferred 
to  commit  that  duty  to  incorporated  companies  ; 
and  has  afforded  aid,  at  least,  in  one  important 
instance,  by  a  loan  of  the  public  credit,  taking  as 
security  a  mortgage  of  the  work.  If  a  similar 
course  shall  be  pursued  in  respect  to  all  the  rail- 
roads which  may  stand  in  need  of  public  assistance, 
and  the  interest  on  the  stock  to  be  thus  loaned 
shall  be  regularly  met  by  the  companies,  the  trea- 
sury will  remain  wholly  unaffected  by  such  mea- 
sures of  aid,  and  in  a  fiscal  point  of  view,  the  State 
will  experience  neither  profit  nor  loss. 

The  Legislature  has  taken  care,  how^ever,  in  the 
charters  by  which  the  rail-road  companies  have 
been  incorporated,  to  reserve  the  right  ultimately 
to  take  those  works  for  public  use,  and  the  State 
may  possibly  exercise   this  right   at   some    future 


39 


period.  The  total  cost  of  the  leading  lines  will 
not  fall  short  of  eighteen  or  twenty  millions  of 
dollars  ;  but  the  State  will  find  no  difficulty,  when- 
ever it  may  see  fit  to  take  these  works,  in  making 
such  financial  arrangements  as  the  occasion  may 
demand. 

The  sum  which  the  treasury  will  require  for  the 
canals  now  in  progress,  will  be  : 

1.  For    enlarging    the  Erie  canal, 

including  damages,        ....     §115,000,000 

2.  For  the  Genessee  Valley  and  the 
Black  River  canals,  (authorized 
to  be  constructed  by  laws  passed 
in  1836,)  in  addition  to  the  amount 
of  $190,920  22,  herein-before  in- 
cluded as  part  of  the  State  debt, 

not  less  than 5,000,000 


120,000,000 


For  the  two  last  mentioned  canals,  loans  have 
been  already  negotiated  to  the  amount  of  |2,800,- 
000,  but  the  proceeds,  (with  the  exception  of  the 
$190,920,)  have  not  yet  been  expended. 


In  addition  to  the  amount  above  stated,  it  may 
be  observed  that  sundry  projects  for  other  canals 
of  smaller   extent,  have  been   more  or  less  enter- 


40 


tained,  including  among  others,  an  extension  re- 
commended in  the  Governor's  message  in  1836, 
of  the  Erie  canal  from  Buffalo  westward  to  a 
point  on  Lake  Erie  less  obstructed  by  ice :  the 
extension  of  the  Black  River  canal  into  the  mine- 
ral districts  of  St.  Lawrence  county  :  the  continua- 
tion of  the  Erie  canal,  or  the  construction  of  a 
branch  from  it  to  some  proper  point  below  the 
Overslaugh  :  and  some  other  extensions  of  exist- 
ing works.  If  any  considerable  portion  of  these 
projects  should  be  carried  into  execution,  the  cost 
will  not  probably  fall  short  of  |5,000,000. 

The  connexion  which  it  is  proposed  to  effect  by 
means  of  a  ship  canal  between  Lake  Erie  and  Lake 
Ontario,  has  been  excluded  from  the  above  esti- 
mate, under  the  belief,  that  a  work  so  interesting 
and  important  in  a  military  point  of  view,  will  be 
constructed  at  the  expense  and  under  the  authority 
of  the  general  government. 

It  thus  appears  : 

1.  That  the  amount  which  the  State  must  expend 
under  existing  laws,  for  the  enlargement  and 
construction  of  canals  already  commenced,  will 
be $20,000,000 

2.  That  the  amount  to  be  paid  from 
time  to  time,  for  taking  rail-roads 
for  public  use,  whenever  the  State 
shall  find  it  beneficial  to  the  pub- 
lic interests  to  do  so,  may  be  from 


41 


ten  to  twenty  millions,  according 
to  the  extent  of  the  works  to  be 
selected :  or  say  .....  $15,000,000 
3.  That  the  amount  to  be  hereafter 
authorized  for  extensions  of  the 
present  canals,  may  be       ...     $5,000,000 


Making  a  total  of $40,000,000 


It  is  not,  however,  to  be  inferred  that  the  com- 
mittee intend  by  statino;  the  above  sums  to  recom- 
mend  an  expenditure  to  the  amount  of  forty  mil- 
lions upon  our  public  works.  It  is  certain  that, 
under  existing  laws,  at  least  one  half  of  that  sum 
must  be  so  expended  ;  but  whether  any  portion  of 
the  residue  will  be  appropriated,  will  of  course  de- 
pend upon  the  views  of  the  present  and  succeeding 
Legislatures.  They  wish  merely  to  be  understood, 
that  if  the  Legislature  from  time  to  time  shall  see 
fit  to  expend  that  sum,  it  may  be  safely  borrowed, 
without  imposing  any  burthens  upon  the  people  ; 
and  that  if  the  views  of  the  Canal  Commissioners, 
as  to  the  future  revenues  of  the  canal,  are  correct, 
the  whole  amount,  within  thirty  years,  may  be  re- 
imbursed, and  added  to  the  productive  property  of 
the  State.  It  is  not  improbable,  that  those  who 
are  in  the  habit  of  decrying  our  public  works,  may 
assert  that  a  debt  is  to  be  incurred  to  an  alarming 
amount,  to  be  handed  down  as  a  grievous  burthen 
to  all  future  generations :  and  yet,  in  truth,  we  shall 
6 


42 

only  hand  down  what  our  fathers  have  transmitted 
to  us,  public  works,  paid  for  and  free  from  debt, 
and  themselves  affording  the  means  of  still  further 
auo-menting  the  power  and  wealth  of  those  who 
are  to  follow  us. 

Nor  will  this  event  be  deemed  at  all  improba- 
ble, when  we  reflect  that  within  the  last  twenty 
years  the  canals  have  come  down  to  us  free  from 
debt,  and  worth  more  than  twenty  millions.  Actual 
experience  has  thus  familiarized  us  with  the  certain 
operation  of  an  excess  of  revenue  in  extinguishing  a 
debt  created  for  public  works, — but  for  the  sake  of 
presenting  the  suject  in  a  more  perspicuous  form, 
an  arithmetical  table  is  subjoined, — exhibiting  the 
progress  of  a  debt  within  the  next  ten  years,  to  the 
extent  of  forty  millions  ;  and  then  the  successive 
stages  by  which  it  will  reach  its  final  extinguish- 
ment. 

In  respect  to  that  part  of  the  annual  report  of 
the  Comptroller  of  this  State  on  the  finances  re- 
ferred to  the  consideration  of  the  committee,  which 
suggests  the  expediency  of  levying  a  tax  for  the 
purposes  of  the  treasury,  they  are  compelled  to 
state  that,  in  their  judgment,  no  necessity  exists 
for  that  measure.  They  are  aware  that,  from  the 
year  1827,  when  the  report  of  Mr.  Wright  an- 
nounced to  the  public  that  internal  improvements 
could  only  be  sustained  by  direct  taxation,  down 
to  the  present  time,  our  fiscal  officers  have  habitu- 


43 


ally  urged  upon  the  Legislature  the  necessity  of 
resorting  to  that  method  of  levying  money  for  the 
use  of  the  State.  It  is  not  without  diffidence,  that 
the  committee  fsel  themselves  compelled  wholly 
to  dissent  from  the  experienced  individuals  who, 
for  the  last  ten  years,  have  controlled  our  public 
affairs  ;  but,  after  a  laborious  and  careful  investiga- 
tion, they  have  been  unable  to  discover  any  reason 
why  such  a  mode  of  raising  money  should  have 
been  recommended.  In  the  opinion  of  the  com- 
mittee there  is  no  possible  ground  upon  which  a 
tax  could  be  justified.  The  treasury  is  full  and 
needs  no  replenishing  :  and  ample  means  are  pro- 
vided for  meeting  the  future  engagements  of  the 
State.  Under  such  circumstances,  to  subject  the 
people  to  the  burden  of  a  direct  tax,  would  be 
equally  unwise  and  unnecessary. 

It  is  stated,  however,  by  the  Comptroller,  and 
the  fact  has  been  repeatedly  urged  in  other  offi- 
cial communications,  that  Mr.  Jefferson  lays  down 
the  rule  that  a  government  disposed  to  cherish  its 
credit  "  should  never  borrow  a  dollar  without  lay- 
ing a  tax  in  the  same  instant  for  paying  the  inte- 
rest annually,  and  the  principal  in  a  given  time." 
But  the  maxim  is  not  sound,  to  the  extent  to  which  it 
is  thus  attempted  to  be  applied.  It  will  be  recollect- 
ed that  Mr.  Jefferson  lived  in  a  period  of  war  and 
wasteful  expenditure;  and  in  speaking  of  the  con- 
sequences of  public  debt,  he  doubtless  intended  to 
refer  to  expenditures  upon  objects   not  of  them- 


44 


selves  yielding  a  pecuniary  return — such  as  the 
public  defence,  the  protection  of  commerce,  or 
the  expenses  of  the  civil  administration.  No  rea- 
son can  possibly  exist  for  extending  the  rule  to 
debts  incurred  for  public  works,  themselves  pro- 
ducing an  income  equivalent  to  the  interest  ;  nor 
is  it  absolutely  requisite,  that  such  revenue  shall 
be  received  "  in  the  same  instant  "  in  which  the 
debt  is  created,  provided  that  it  will  be  realized 
within  a  reasonably  moderate  period.  It  may,  in- 
deed, be  admitted,  that  when  such  result  is  pro- 
blematical, or  only  to  be  realized  at  a  remote 
period,  the  tax  ought  to  be  laid  when  the  v\  ork  is 
commenced  ;  provided  always  that  the  government 
possesses  no  other  pecuniary  means  of  paying  the 
interest.  But  then  it  must  be  shown  that  no  such 
auxiliary  resources  are  possessed,  for  otherwise 
there  could  be  no  necessity  for  levying  money  by 
tax  for  the  mere  purpose  of  preserving  pecuniary 
funds  which  could  be  more  directly  and  economi- 
cally applied  to  the  object  in  question.  And  this 
is  the  view  which  the  Legislature  has  taken  of  this 
question,  from  the  year  1826,  when  the  State  tax 
was  discontinued,  down  to  the  present  moment, 
xllthough  annually  urged  to  levy  a  tax,  they  have 
annually  refused  :  but  have  seen  fit  to  rely  on  the 
revenues  from  the  public  works,  to  meet  the  de- 
mands on  the  treasury.  The  result  has  shown 
that  they  were  right  ;  for  although  the  State  since 
1825,  has  expended  in  constructing  lateral  canals 
the  sum  of  |3, 364, 304,  it  has  still  remaining  an 


45 


annual  surplus  revenue  of  nearly  $800,000  ;   and 
its  people  are  free  from  taxation. 

Without  pretending,  therefore,  to  detract  from 
the  general  authority  of  the  maxim  thus  quoted,  it 
may  be  claimed  that  our  own  experience  has  shown 
it  to  be  inaccurate,  when  applied  to  debts  created 
for  works  of  internal  improvement.  In  truth,  it  is 
hardly  credible  that  Mr.  Jefferson  ever  intended 
thus  to  apply  it  ;  but  if  he  did,  it  only  shows,  what 
his  incredulity  in  respect  to  the  Erie  canal  had 
sufficiently  testified,  that  enterprises  of  that  char- 
acter had  not  occupied  his  most  deliberate  at- 
tention. 

It  will  be  perceived  that  the  very  foundation 
upon  which  the  financial  calculations  of  the  com- 
mittee are  based,  is  the  estimate  of  the  Canal 
Commissioners  submitted  to  the  Legislature,  in 
which  they  state  that  the  Erie  canal,  w-ithin  a  few 
years  after  its  enlargement,  will  produce  an  an- 
nual revenue  of  §3,000,000.  The  importance  of 
verifying  the  accuracy  of  this  estimate  will  be  evi- 
dent, as  any  material  error  would  lead  to  the  most 
injurious  consequences.  The  inquiry  has  neces- , 
sarily  embraced  details  of  unusual  magnitude,  but 
having  subjected  them  to  a  careful  scrutiny,  the 
committee  state  succinctly,  the  reasons  why,  in 
their  opinion,  that  estimate  is  entitled  to  reliance. 

The  steady  progress  of  population  and  wealth  of 


46 


that  portion  of  our  own  State  which  is  tributary  to 
the  canal,  needs  little  remark.  Whether  owing 
to  the  growth  of  the  country  on  its  immediate 
borders — or  to  the  influence  of  the  lateral  canals, 
in  swelling  its  commerce, — the  tables  of  tonnage 
exhibit  a  rate  of  increase  which  will  probably  be 
maintained  for  many  years.  Although  the  con- 
tribution thus  furnished  by  the  State  to  the  reve- 
nues of  the  canal,  at  the  present  time  is  large,  (for 
two-thirds  of  the  whole  of  its  tolls  are  now  drawn 
from  the  trade  of  our  own  people,)  yet  the  amount 
becomes  relatively  unimportant,  when  compared 
with  the  enormous  results  we  are  hereafter  to  de- 
rive from  our  commerce  with  the  west.  Let  us 
then  advert  briefly  to  the  present  extent  and  fu- 
ture progress  of  that  commerce,  and  the  probable 
eff'ect  which  it  is  hereafter  to  produce  upon  our 
fiscal  aff"airs. 

The  western  termination  of  the  Erie  canal  looks 
out  upon  Lake  Erie,  the  most  southerly  and  central 
of  the  great  chain  of  navigable  lakes,  which  stretch- 
es far  into  the  interior  from  our  western  boundary. 
Around  these  inland  seas,  a  cluster  of  five  powerful 
States  is  rapidly  rising.  The  territory  which  they 
comprise,  and  which  is  to  become  tributary  to  the 
canal,  embraces  that  great  area,  extending  from 
the  lakes  on  the  north  to  the  Ohio  on  the  south, 
and  from  the  western  confines  of  this  State  to  the 
upper  Mississippi,  and  containing  280,000  square 
miles.     To  measure  its  extent  by  well-known  ob- 


47 


jects,  it  is  fifteen  times  as  large  as  that  part  of  the 
State  of  New  York,  west  of  the  county  of  Oneida — 
nearly  twice  as  large  as  the  kingdom  of  France — 
and  about  six  times  as  extensive  as  the  whole  of 
Ensfland,  It  contains  180  millions  of  acres  of 
arable  land,  a  large  portion  of  which  is  of  surpass- 
ing fertility. 

The  productive  power  of  this  region,  and  its 
capability  of  supplying  tonnage  for  export,  are 
greatly  strengthened  by  the  facilities  which  it  en- 
joys for  cheap  and  easy  transportation.  In  this 
respect,  no  country  on  the  face  of  the  globe  enjoys 
greater  natural  advantages  ;  for  it  is  nearly  encir- 
cled by  navigable  waters  ,  and  its  broad  area  is 
intersected  in  numerous  directions  by  streams  fur- 
nishing ample  means  of  conveyance,  while  unusual 
facilities  for  the  construction  of  canals,  and  other 
artificial  channels  of  communication,  are  afforded 
by  the  level  and  uniform  character  of  its  surface. 

These  being  its  geographical  advantages,  it 
needs  only  the  requisite  number  of  inhabitants,  to 
fully  develope  its  agricultural  resources.  Its  pro- 
gress in  this  respect  has  been  truly  surprising.  In 
1816,  Ohio  was  the  only  organized  State  govern- 
ment within  its  limits.  In  that  year,  Indiana, 
having  obtained  the  requisite  number  of  60,000 
inhabitants,  entered  the  Union,  and  took  its  place 
by  the  side  of  Ohio.  Illinois  and  Michigan  were 
then  distant  and  feeble  territories,  with  a  i^ew  set- 


48 


tiers    thinly  scattered   over    their  broad    surface, 
while  Wisconsin,  unknown  even  by  name,  Mas  an 
undistinguished  portion  of  the  great  North-Western 
territory.     In  the  brief  period  of  twenty-one  years, 
such   has  been  the   influx  of  population  into  this 
great  district,  that  Ohio,  the  eldest  member  in  this 
brotherhood  of  nations,   now   numbers   1,400,000 
inhabitants  ;  Indiana  upwards  of  600,000  ;   Illinois 
and  Michigan,  (both  of  whom  have  organized  their 
governments  and  come  into  the  Union,)  700,000  ; 
while  west  of  Lake  Michigan,  not  only  is  Wiscon- 
sin   rapidly   rising,   but    even    beyond    the  upper 
Mississippi,    30,000  citizens  have  already  laid  the 
foundation  of  yet  another  State.     Such   is    the   on- 
w^ard  march  of  this  population,  that  the  amount  of 
its  annual  increase  alone  exceeds  in  number  the 
white  inhabitants  often  of  the  States  of  the  Union. 
The  population  already  embraced  within  the  district 
in  question,  falls  little  short  of  three  millions,  and 
if  the  same  rate  of  progress  shall  be  maintained  for 
the  twelve  years  next  to  come,  by  the  year  1850 
it  will  exceed  six  millions. 

The  peculiar  activity  and  energy  of  these  peo- 
ple, and  their  power  most  rapidly  to  develope  the 
resources  of  the  broad  domain  which  they  inhabit, 
are  also  worthy  of  consideration,  in  estimating  the 
eventual  extent  of  their  trade.  They  probably  pos- 
sess a  greater  aggregate  power  of  production  than 
any  other  portion  equally  numerous  of  the  human 
race.     Their  population  is  made  up  almost  exclu- 


49 


sively  of  the  young,  the  resolute,  the  vigorous,  and 
the  intelligent,  who  have  gone  from  the  more 
crowiei  communities  in  the  eastern  and  middle 
portions  of  the  Union,  to  seat  themselves  around 
this  chain  of  waters,  and  there  build  up  an  empire. 
They  have  taken  with  them  the  laws,  the  habits, 
the  language,  and  the  institutions,  civil  and  reli- 
gious, of  their  parent  States,  but  above  all,  they 
have  carried  into  that  vast  field,  an  honest  love  of 
labour,  a:i.l  in  the  very  act  of  organizing  their  go- 
vernm3nts,  they  testified  their  willingness  to  exert 
an  J  rely  on  their  own  energies,  by  prohibiting 
slavery  forever,  throughout  all  their  limits. 

This  group  of  inland  States  has  two  outlets  for 
its  tra  le  to  the  ocean  ;  one  by  the  Mississippi  to 
the  G.ilf  of  M2x:ic3;  the  other  through  Lake  Erie 
and  the  navi2:able  communications  of  this  State  to 
the  Atlantic.  Whether  it  be  attributable  to  simi- 
larity of  origin,  of  laws,  or  of  habits,  or  to  ties  of 
CDnsanguinity,  or  superior  salubrity  of  climate,  this 
people  evidently  prefer  the  market  on  the  Atla  itic, 
and  they  are  making  prodigious  efforts  to  reach  it. 
Three  great  canals,  (one  of  them  longer  than  the 
Erie  Canal,)  embracing  in  their  aggregate  length 
about  one  thousand  miles,  are  to  connect  the  Ohio 
with  Lake  Erie,  while  another  deep  and  capacious 
channel,  excavated  for  nearly  thirty  miles  through 
soli:!  rock,  unites  Lake  Michigan  with  the  navi- 
gable waters  of  the  Illinois.  In  addition  to  these 
broad  avenues  of  trade,  they  are  also  constructing 

7 


50 


lines  of  rail-roads,  not  less  than  1,500  miles  in 
extent,  in  order  to  reach  with  more  ease  and  speed, 
the  lakes,  through  which  they  seek  a  conveyance 
to  the  sea-board.  The  undaunted  resolution  of 
this  energetic  race  of  men  is  strikingly  evinced  by 
the  fact,  that  the  cost  of  the  works  which  they 
have  thus  undertaken,  (and  most  of  which  are  in 
actual  progress  )  will  exceed  forty-eight  millions 
of  dollars — a  sum  far  exceeding  all  that  New 
York,  with  two  millions  of  inhabitants,  and  two 
hundred  years  of  accumulated  wealth,  has  ever 
attempted.  Thi  ciicumstance,  moreover,  is  par- 
ticularly important,  that  the  public  works  in  each 
of  these  widespread  states  are  arranged  on  a  har- 
monious plan,  each  having  a  main  line  supported 
and  enriched  by  lateral  and  tributary  branches, 
thereby  bringing  the  industry  of  their  whole  peo- 
ple, into  prompt  and  profitable  action,  while  the 
systems  themselves  are  again  united  on  a  grander 
scale,  in  a  series  of  systems,  comprising  an  aggre- 
gate length  of  more  than  2,500  miles,  with  lake 
Erie  as  its  common  centre. 

The  various  portions  of  this  vast  work  are  now 
in  a  train  of  rapid  construction.  Indiana  alone  has 
6,000  men  in  her  employ  ;  and  Ohio,  Illinois,  and 
Michigan  are  making  correspondent  efforts  ;  so 
that  it  m.ay  be  confidently  predicted,  that  within 
seven  years  from  this  time,  the  whole  inland  trade 
of  that  broad  region  around  the  lakes,  will  crovvd 
the  entrance  of  the  Erie  canal  on  its  way  to  the 
Atlantic. 


51 


It  will  at  once  b^^  obvious,  tbat  the  whole  of 
the  tonnage  thus  to  be  furnished  by  these  com- 
munities, whatever  may  be  its  bulk,  will  pay 
to  our  treasury  a  transit  duty  for  the  whole  length 
of  the  canal  ;  an  1  will  therefore  yield  a  revenue 
twice  as  large  as  an  equal  quantity  of  products 
from  the  districts  of  our  own  State,  mid-way  be- 
tween the  Lakes  and  the  Hudson. 

And  what  will  be  the  amount  of  this  tonnage, 
and  by  what  standard  shall  we  measure  it  ? 

If  we  take  the  area  and  the  products,  and  the 
population  of  our  own  State  as  a  guile,  we  fall 
far  short  ;  and  even  if  we  resort  to  more  populous 
nations — if  we  select  England  or  Franca,  and 
compare  their  prorluctive  power  with  that  oi^  this 
youthful  and  rapidly  increasing  race,  the  parallel 
will  not  be  complete  ;  for  a  much  smaller  proportion 
of  the  inhabitants  of  those  kingdoms  is  devt)ted  to 
agricultural  pursuits  ;  nor  is  their  inland  commerce 
wholly  concentrated  with  any  single  channel. 

But  we,  fortunately,  possess  ai  adequate  and 
appropriate  standard  in  the  Mississippi  river,  the 
great  rival  and  competitor  of  the  Erie  canal,  with 
which  it  is  destined  hereafter  to  hold  divided  sway 
over  the  vast  trade  of  the  west.  The  nuinber  oi^ 
inhabitants  who  at  present  employ  that  stream  and 
its  tributaries,  for  the  purpose  of  conveyance,  is 
scarcely  five  millions,  and  yet  the   amount  which 


52 


they  paid  during  the  last  year  for  transportation 
on  its  waters,  was  between  eight  and  nine  millions 
of  dollars. 

The  momentous  question,  whether  the  tonnage 
of  the  inland  district  under  examination  is  to  seek 
the  Atlantic  through  the  Erie  Canal,  or  descend 
the  Mississippi  to  the  Gulf  of  Mexico,  is  mainly 
to  depend  upon  the  comparative  cost  of  transport- 
ation. But  when  we  consider  the  circuitous  course 
of  the  Mississippi,  the  less  of  time  in  ascending 
its  strong  current,  and  the  greater  rapidity  of 
communication  presented  by  the  Atlantic  route  ; 
when  we  advert  moreover  to  the  ample  volume 
and  trifling  lockage  of  the  enlarged  canal ;  and 
especially  when  we  estimate  the  commercial  effects 
of  the  navigable  passage  opened  by  the  Hudson 
through  the  Alleghany  ridge  ;  we  shall  perceive 
that  when  the  artificial  communications  thus  con- 
centrating upon  Lake  Erie  shall  be  put  in  full 
operation,  the  cost  of  transporting  agricultural 
products  from  the  interior  of  this  district  will  not 
materially  vary,  whether  carried  to  the  Atlantic  or 
the  Gulf  of  Mexico.  The  inference,  then,  may 
safely  be  drawn,  that  whenever  a  population  of 
five  millions  around  these  western  waters  shall 
resort  to  the  Erie  canal  for  the  means  of  convey- 
ance, they  will  supply  it  with  an  amount  of  tonnage 
equally  great  with  that  now  transported  on  the 
Mississippi  by  an  equal  number  of  inhabitants. 

It  is  estimated  that  the  value  of  agricultural  pro- 


53 


ducts  which  annually  descend  the  Mississippi  and 
its  tributaries,  has  already  reached  $70,0 JO, COO. 
The  value  of  the  property  transported  on  the  ca- 
nals of  the  State  of  New-York,  during  the  year 
.1836,  is  shown  by  official  tables  to  be  $67,000,000. 
Of  that  amount,  it  maybe  estimated  that  $'50,000,000 
consisted  of  property  belonging  exclusively  to  a 
portion  of  the  population  of  this  State  net  exceed- 
ing a  million  and  a  half  in  number,  being  at  the 
rate  of  $33  33  for  each  inhabitant  ;  and  that  the 
amount  which  they  paid  for  its  transportation  ex- 
ceeded two  millions  of  dollars.  If  the  same  scale 
of  production  and  consumption  shall  be  asNumed 
for  the  population  of  the  district  in  question,  (and 
no  reason  is  perceived  why  it  should  not  be,)  the 
six  millions  of  inhabitants  in  the  west  who  will  re- 
sort to  the  Erie  canal  for  the  means  of  convey- 
ance, will  furnish  tonnage,  in  exports  and  imports, 
of  at  least  $200,000,000  in  value.  The  experience 
of  other  nations  will  show  that  this  amount  is  not 
over-estimated.  The  food  alone  produced  in  Eng- 
land in  the  year  1835,  by  an  agricultural  popu- 
lation of  about  eight  millions,  was  valued  by  their 
political  economists  at  $604,000,000  ;  while  that  of 
France  was  ascertained  by  its  Minister  of  Finance 
to  be  5,237,000,000  of  francs,  or  $980,000,000. 

But  there  are  peculiar  reasons  why  the  propor- 
tion of  agricultural  exports  of  this  great  inland 
population  should  far  exceed  that  of  other  nations. 
The  exuberance  of  their  soil,  the  salubrity  of  their 


54 

climate,  and  the  cheapness  of  their  lands,  (arising 
from  the  vast  supply  within  their  limits)  will  ena- 
ble them  always  to  furnish  food  to  every  other 
portion  of  the  continent,  on  more  advantageous 
terms  than  it  can  be  elsewhere  produced.  Labor 
there  reaps  its  best  reward,  and  harvests  of  an 
hundred  fold  repay  its  exertions  ;  and  such  is  the 
superior  productiveness  of  this  region,  that  when 
the  completion  of  its  great  series  of  public  works 
shall  bring  a  bushel  of  wheat  on  the  plains  of  In- 
diana within  a  few  cents  in  price  of  a  bushel  in 
New  England,  its  production  in  New  England  must 
cease.  The  same  cause  will  probably  operate  to 
change  the  culture  of  portions  even  cf  our  cwn 
State  ;  for  the  unequalled  fertility  of  the  West  will 
always  enable  it  to  supply  those  products  requir- 
ino-  richness  of  soil  with  a  less  amount  of  labour, 
and  consequently  at  a  cheaper  rate,  than  they  can 
be  produced  within  our  own  borders. 

The  consequences  then  of  perfecting  these  sys- 
tems of  intercommunication  will  inevitably  be  a  dis- 
tribution of  labor,  on  a  grand  scale,  throughout  the 
whole  northern  part  of  the  continent  :  the  maritime 
portions  engrossing  the  active  pursuits  of  naviga- 
tion, commerce,  and  manufactures,  while  this  cen- 
tral group  of  agricultural  States  will  become  the 
common  granary  of  the  Union,  and  discharge  the 
important  duty  of  supplying  subsistence  to  all  the 
surrounding  communities.  Indeed  they  have  begun 
even  now  to  perform  that  office.     The  vallies  of  the 


55 


Miami,  the  Wabash,  and  the  Illinois,  are  already 
pouring  out  their  overflowing  riches  upon  the  cotton 
planting  States  below  ;  and,  although  their  power  of 
exportation  has  hitherto  been  kept  in  check  by  their 
rapid  increase  in  numbers,  yet  it  is  stated,  that  du- 
ring the  last  season,  exports  amounting  in  value  to 
15  or  20,000,000  of  dollars  descended  the  Missis- 
sippi and  its  tributaries,  from  that  part  of  the  val- 
ley north  of  the  Ohio,  and  constituting  a  portion 
of  the  great  district  in  question.  Nor  is  this  de- 
scenJing  stream  of  trade  wholly  withdrawn  from 
our  own  channels  of  conveyance,  for  its  proceeds 
find  their  way  by  a  circuitous  course  through  the 
canals  of  New  York,  and  in  that  form  swell  the  i-e- 
venues  of  the  treasury  : — and  the  fact  will  strikins-ly 
illustrate  the  value  of  the  Union,  in  binding  in  bonds 
of  mutual  benefit  all  our  commercial  interests,  both 
foreign  and  domestic,  and  in  animating  every  por- 
tion of  our  various  industry,  that  the  food  thus 
exported  from  the  inmost  recesses  of  the  West  — 
exchanged  for  cotton  at  the  mouth  of  the  Missis- 
sippi—  exported  in  that  form  to  the  workshops  of 
Europe  —  again  exchanged  for  their  fabrics,  and 
brought  home  by  our  shipping  to  the  seaports  of 
the  north,  —  is  at  last  returned  through  the  Erie 
canal  to  the  luxuriant  rallies  from  which  it  first 
originated  ;  thus  revolving  through  the  whole  circle 
of  our  widespread  commerce.  It  is  only  when 
we  view  the  Erie  canal  as  one  of  the  miiihity  ses- 
ments  of  that  vast  circle,  that  we  can  rightly 
estimate  the  importance  and  grandeur  of  its  con- 
nexions. 


56 


It  is  necessary  also  to  be  apprized  of  the  course 
of  this  traJe,  in  order  to  explain  the  disparit}'  in 
value  which  will  always  exist  between  the  des- 
cending and  the  ascending  cargoes.  The  amount 
of  merchandise  now  sent  into  the  Western  States 
very  far  exceeds  that  of  their  products  reaching 
the  Atlantic  sea-board.  An  additional  reason  ex- 
ists, it  is  true,  for  this  difference.  The  flood  of 
emigration  which  has  poured  into  that  portion  of 
the  country  has  temporarily  produced  so  great  a 
disproportion  between  its  consuming  and  produc- 
ing classes,  that  they  have  scarcely  been  able  to 
obtain  an  adequate  supply  of  food  even  from  their 
own  exuberant  soil.  Population  has  outstripped 
production  :  so  that  their  agricultural  products,  in- 
stead of  seeking  a  market  in  the  eastern  portions 
of  the  Union,  have  been  sent  westward  in  larofe 
quantities  into  the  upper  lakes  ;  and  such  is  the 
movement  which  animates  all  that  resrion,  that 
more  than  four  hundred  vessels,  during  the  last 
year,  reached  the  port  of  Chicago,  at  the  south- 
ernmost extremity  of  Lake  Michigan.  So  long 
as  this  great  influx  of  population  shall  continue, 
the  capacity  of  these  interior  States  to  supply 
tonnage  for  the  Erie  canal  will  be  necessarily 
diminished,  but  the  effect  will  be  only  to  augment 
more  enormously  their  eventual  power  of  expor- 
tation ;  and  thus  the  present  temporary  check  is 
but  aiding  increased  energy  to  those  causes,  which 
are  operating  with  concentrated  force  to  swell  our 
future  commerce. 


57 


The  progress  in  population  of  that  portion  of 
this  inland  territory,  immediately  adjacent  to  the 
lakes,  has  been  three  times  as  great  as  its  pro- 
gress in  the  portion  adjacent  to  the  Ohio.  The 
ratio  of  increase  in  the  former,  between  the  years 
1820  and  1830,  (as  shown  by  the  census,)  was 
130  per  cent.,  and  in  the  latter,  only  44  per  cent.; 
and  the  comparative  rates  since  that  time  have 
not,  probably,  lessened.  And  this  circumstance 
explains  why  so  large  a  surplus  should  have  been, 
furnished  for  exportation  from  the  section  near 
the  Ohio,  in  comparison  with  that  which  has 
hitherto  found  its  way  from  the  lakes  into  our 
canals.  The  total  amount  of  tolls,  realized  by 
our  treasury  in  the  year  1836,  from  property  pass- 
ing to  and  from  the  country  surrounding  the  lakes, 
was  only  $385,000,  or  less  than  one-twentieth  part 
of  the  sum  paid  annually  for  transportation  on  the 
Mississippi,  and  its  confluents.  To  fix  the  pre- 
cise period  when  the  population,  now  swarming 
into  this  district,  wull  reach  the  point  when  their 
power  of  furnishing  products  for  exportation,  will 
fully  exhibit  itself,  is,  of  course,  impracticable. 
The  same  causes  which  operate  to  diminish  their 
exports,  now  that  their  population  has  reached  to 
three  millions,  may  not  be  wholly  removed,  when 
its  numbers  shal!  be  doubled,  but  it  may  be  confi- 
dently predicted,  that  before  that  time  they  will  be 
so  firmly  seated  on  their  productive  soil,  as  to  be 
able  to  supply  a  vast  surplus  of  food  for  export. 
8 


58 

The  population  of  the  western  portion  of  our 
own  State  still  continues  to  increase  with  consid- 
erable rapidity,  but  it  nevertheless  furnishes  an  an- 
nual export  of  at  least  |20,000,000  in  value.  By 
the  year  1845,  the  States  of  the  West,  surrounding 
the  lakes,  will  hold  the  same  relative  position  in 
respect  to  the  whole  of  the  Erie  canal,  which  the 
counties  of  New  York,  west  of  the  Seneca  lake, 
now  bear  to  that  part  of  the  line  east  of  Utica. 
Our  trade  will  then  be  measured,  not  by  coun- 
ties, but  by  sovereign  States,  themselves  contain- 
ing their  fifty  counties;  and  our  revenues,  no 
longer  dependent  on  the  villages  and  townships 
scattered  along  the  borders  of  the  canal,  will  be 
drawn  from  the  wide-spread  and  populous  com- 
munities, inhabiting  the  broad  expanse  between 
the  Ohio  and  the  Lakes. 

We  obtain,  then,  the  following  facts,  by  which 
to  guide  the  present  inquiry  : — 

That  the  value  of  the  tonnage,  annually  trans- 
ported on  the  canals  of  this  State,  being  $67,634,- 
000,  and  the  tolls  paid  being  .^1,614,000,  the  rate 
of  toll  is  about  2  ^  per  cent,  on  the  value  of  the 
tonnage  : — 

That  this  rate  increasing  according  to  the  dis- 
tance from  tide  water,  of  the  place  from  and  to 
which  the  tonnage  is  transported,  the  rate  paid  on 
the  western  section  of  the  Erie  canal,  is  proba- 


59 

bly  as  high  as  four,  or  even  five  per  cent.  : — 
(The  present  toll  of  32  cents  on  a  barrel  of  flour 
worth  §8,  passing  the  whole  length  of  the  canal, 
is  4  per  cent.,  or  5  per  cent.,  if  valued  at  §6  : — ) 

That  the  rate  of  toll,  on  commodities  passing 
to  and  from  the  States  west  of  Buffalo,  may  there- 
fore be  safely  assumed  to  be  equal  to  at  least  two 
per  cent,  on  their  value;  and  it  is  believed,  that 
the  interests  of  the  State  will  not  require  a  reduc- 
tion of  the  tolls  below  that  rate  : — 

That  a  population,  within  this  State,  of  one 
million  and  a  half  of  inhabitants,  furnished  a  ton- 
nage of  §50,000,000  to  the  canals, — and  that, 
therefore  the  population  of  the  States  in  question, 
when  it  shall  amount  to  six  millions,  can  furnish 
a  tonnage  of  ^§200,000,000.  It  may,  however,  be 
allowed,  that  a  considerable  portion,  and  perhaps 
two  fifths  of  their  exports,  will  continue  to  descend 
the  Mississippi  and  its  tributaries,  and  that  one 
fifth  of  their  imports  may  ascend  that  stream. 

We  shall  then  have  these  results  : 

Descending  cargoes,  after  deduct- 
ing two  fifths, sS60,000,000 

Ascending  cargoes,  after  deduct- 
ing one  fifth, 80,000,000 


Total  trade,     .     .     .   §140,000,000 


60 


At  the  present  rates  of  toll,  say  at  four  per 
cent.,  this  trade  would  yield  an  annual  revenue  to 
our  treasury  of  $5,600,000  ;  and  if  reduced  to  two 
per  cent.,  it  would  yield  $2,800,000  ;  and  even  at 
one  per  cent.,  (equal  to  2  cents  only  on  a  bushel 
of  wheat,)  it  would  yield  $1,400,000. 

The  evidence  furnished  by  these  facts  has  there- 
fore satisfied  the  committee,  that  the  estimate  of  the 
Canal  Commissioners,  that  the  tolls  of  the  Erie  ca- 
nal when  enlarged  will,  at  the  present  rates,  pay  an- 
nually three  millions  of  dollars,  and  that  one-half 
of  that  sum  will  be  received  from  property  passing 
to  and  from  other  States,  is,  to  say  the  least,  not 
exaggerated. 

It  will  be  observed,  that  many  of  the  views 
which  are  above  taken  of  the  future  magnitude  of 
our  inland  commerce,  will  be  applicable  to  the 
two  lines  of  rail-road  which  are  to  traverse  our 
territory  from  the  Hudson  to  Lake  Erie.  The 
immense  effects  which  these  wonder-working  in- 
struments of  commerce  are  to  produce  in  securing 
the  trade  of  the  West  to  the  Atlantic  States,  and 
in  binding  the  most  distant  portions  of  our  country 
in  bonds  of  beneficial  intercourse,  would  furnish, 
upon  the  proper  occasion,  a  subject  of  interesting 
and  profitable  inquiry.  Nor  need  it  be  apprehended 
that  they  will  affect  injuriously  our  fiscal  interests, 
— for  so  far  from  lessening  the  commerce  of  the 
canals,  they  will  more  probably  serve   to   secure 


61 

and  increase  it,  by  affording  the  means  of  rapid 
transportation  for  property  and  persons  during 
those  winter  months  in  which  their  navigation  is 
impeded,  and  thereby  preventing  the  diversion 
into  other  channels  of  those  more  bulky  pro- 
ducts which  furnish  to  canals  their  most  lucrative 
revenues. 

Regarding  the  event  as  not  improbable,  that  the 
State  at  no  distant  period  will  take  these  great 
thoroughfares  of  trade  and  travel  as  public  pro- 
perty, and  that  they  are  eventually  to  become  a 
portion  of  our  system  of  public  works,  of  which 
all  the  parts  will  mutually  sustain  and  strengthen 
each  other, — the  growth  of  the  West  in  swelling 
their  revenues  is  by  no  means  a  matter  of  indif- 
ference to  the  public  treasury. 

The  committee  will  not  trespass  upon  the  at- 
tention of  the  House,  by  expatiating  upon  the 
grandeur  of  the  prospect  which  would  open  upon 
us,  were  we  to  look  beyond  the  brief  period, 
which  the  present  view  has  embraced.  It  is  for 
the  philanthropist  and  statesman,  to  indulge  those 
feelings  of  honest  hope  and  patriotic  pride,  which 
cannot  but  arise,  in  contemplating  the  mighty 
realities  which  the  future  has  in  store.  The  duty 
which  the  present  occasion  has  required  of  the 
committee,  has  been  of  a  more  practical  charac- 
ter.    They  have  attempted  honestly,  perhaps  over- 


62 


zealously,  to  show  that  our  own  noble  State  is 
neither  ruined  nor  bankrupt, — that  its  treasury 
is  neither  impoverished  nor  exhausted, — and  that, 
however  impeded  in  its  progress  by  a  narrow  po- 
licy which  would  retard  its  growth,  undervalue  its 
strength,  and  stifle  its  energies,  it  is  yet  vigorous 
and  erect,  and  able  to  move  onward  with  a  giant's 
powers.  They  have  sought  to  show  that  the  foun- 
dations of  our  prosperity  are  deeply  laid  ;  that  our 
resources  are  manifold,  and  that  they  will  prove 
adequate  to  any  efforts  which  our  government  may 
make,  to  promote  the  prosperity,  reward  the  in- 
dustry, or  stimulate  the  enterprise  of  our  citizens, 
whether  occupying  the  fair  and  fruitful  plains  of 
the  west, — the  forests  and  mines  of  the  north, — 
or  the  sunny  slopes  and  fertile  vallies  of  our  south- 
ern and  midland  districts. 

They  will  not  attempt  to  measure  the  conse- 
quences which  the  completion  of  a  great  and  har- 
monious system  of  intercommunication,  extending 
into  the  utmost  recesses  of  the  interior,  and  con- 
centrating within  our  borders  the  trade  of  the 
most  populous  portion  of  the  continent,  will  pro- 
duce, in  augmenting  the  aggregate  riches  of  our 
State  ;  in  covering  its  surface  with  opulent  cities  ; 
— in  swelling  its  commercial  marine  ; — in  securing 
its  political  supremacy  ;  and  in  enlarging,  in  all 
respects,  its  prosperity,  power,  and  glory.  Nor 
will   they    seek   to  compute  the  pecuniary  results 


63 


which  this  vast  and  ever  increasing  stream  of  inland 
trade,  flowing  through  our  territory  for  all  future 
time,  will  produce  in  augmenting  the  wealth  of  its 
commercial  metropolis.  The  history  of  Venice,  in 
its  palmiest  days,  stretching  her  long  line  of  islands 
and  colonies  far  into  the  East,  and  controlling  by 
her  position  the  commerce  of  Asia,  presents  but  a 
feeble  picture  of  the  splendour  and  riches  which 
our  own  great  mart  must  eventually  attain. 

Still  less  will  they  seek  to  span  within  their 
narrow  arithmetic,  the  pecuniary  value  of  the 
illimitable  West.  Were  they  to  state  that  from  an 
assessed  value  in  1798,  of  only  26  millions,  for  all 
the  vast  territory  west  of  the  mountains,  stretching 
from  the  Gulf  of  Mexico  to  Lake  Superior,  wealth 
has  arisen  and  been  created  within  the  short  space 
of  forty  years  to  the  amount  of  twelve  hundred 
millions  of  dollars,  they  would  have  attained  only 
the  first  step  in  that  long  series,  by  which  an 
empire  is  to  ascend  to  a  height  of  power  and 
dominion  as  yet  unequalled  in  the  history  of  our 
race. 

Least  of  all  will  they  attempt  to  compute  the 
pecuniary  consequences  of  these  great  arteries  of 
trade,  in  cementing  and  preserving  the  union  of 
these  free  and  flourishing  republics.  It  is  not  for 
New  York,  or  her  sons,  to  "  calculate  the  value" 
of  that    sacred   bond.     But  if  we   would  catch  a 


glimpse,  however  imperfect,  of  the  gigantic  stake 
which  is  depending  on  our  prudence  and  patriot- 
ism— if  we  would  count  the  cost  of  ruined  cities, 
and  desolated  fields, — of  our  lakes  and  rivers, 
obstructed  by  fleets  and  fortresses  in  war,  and  by 
commercial  restrictions  still  more  destructive  in 
peace,  we  may  contrast  Europe  as  it  is,  convulsed 
by  centuries  of  strife,  and  broken  into  jarring, 
disunited,  and  discordant  communities,  with  Eu- 
rope, as  it  would  have  been,  had  its  whole  popu- 
lation been  united  like  ours,  at  the  very  origin  of 
their  governments,  under  one  common  law,  speak- 
ing one  common  language,  and  bound  by  one  com- 
mon constitution. 

Let  us  then  go  forward  in  th^  broad  path  of 
duty  which  is  spread  before  us — and  in  riveting, 
as  now  we  may,  the  bonds  which  unite  the  mighty 
members  of  this  glorious  Union,  discharge  those 
high  and  solemn  obligations  which  we  owe  not 
only  to  ourselves  and  those  who  surround  us,  but 
to  the  long  line  of  generations  who  are  to  follow 
in  after  ages. 

The  Committee,  in  order  to  carry  out  the  views 
of  this  report,  will  prepare  a  bill,  making  the  neces- 
sary appropriations,  as  soon  as  their  object  and 
amount  shall  be  determined  by  the  proper  com- 
mittees, and  sanctioned  by  the  House.  In  the 
mean  time  they  beg  leave  to  submit  the  following 
resolution  : 


65 


Resolved,  That  it  is  not  necessary  or  expedi- 
ent to  levy  a  direct  tax. 

SAMUEL  B.  RUGGLES,  1    ^       . 
VICTORY  BIRDSEYE,      !    ^^mmtttee  of 


THOMAS  B.  COOKE, 
ABNER  LEWIS, 

March  12,  1838. 


>      Ways  and 
Means. 


I 


APPENDIX 


REFERRED  TO  IN  THE  REPORT. 


Estimate  of  the  progress  of  a  State  Debt  to  the  amount  of  Forty 
Bullions  of  Dollars,  and  the  progressive  stages  hy  which  it  will 
reach  its  final  extinguishment.     • 

It  is  deemed  safe  to  assume,  that  the  nett  revenue  from  the 
canals,  for  the  year  1838,  will  be  1800,000. 

It  is  also  deemed  safe  to  assume,  that  such  a  nett  revenue  will 
increase,  for  the  four  next  years  after  1838,  at  the  rate  of  $100,- 
000  per  annum;  and  that  after  that  time,  to  the  end  of  the  year 
184-5,  owing  to  the  completion  of  the  enlarged  Erie  canal,  and 
other  works  of  internal  improvement,  and  the  great  increase  of 
the  commerce  through  our  public  works,  with  the  Western 
States,  such  annual  increase  will  be  $200,000  per  annum ;  and 
that  after  the  year  1845,  owing  to  the  operation  of  like  causes, 
and  the  more  extended  and  perfect  development  of  the  commerce 
and  agriculture  of  the  far  West,  such  increase  will  beat  the  rate 
of  $31)0,000  per  annum,  until  such  increase  shall  reach  $3,000,- 
009  per  annum,  which  will  be  in  the  year  1849. 

It  will  be  further  assumed,  that  the  tolls  will  probably  be  so 
reduced,  that  the  nett  revenues  from  the  canals  will  not  exceed 
the  said  sum  of  $3,000,000;  and  that  after  the  full  completion 
of  our  internal  improvements,  the  State  may  make  such  further 
reductions  in  the  tolls,  as  the  general  interests  and  wishes  of  its 
people  may  require. 


It  is  not  supposed  that  this  estimate  will  be  found  entirely  ac- 
curate ;  or  that  the  ratio  of  gradations  of  increase  in  the  different 
years,  will  precisely  conform  to  these  assumptions.  But  inas- 
much as  our  past  experience,  and  a  reasonable  estimate  of  our 
future  revenue,  afford  entire  assurance  that  the  estimates  thus 
assumed  for  future  years  will  fall  below  the  actual  results,  it  is 
deemed  safe  to  proceed  upon  such  assumptions  for  the  purpose 
of  the  present  estimate. 

1.  We  will  suppose  the  State,  for  the  next  ten  years,  should 
borrow  four  millions  of  dollars  a  year  for  the  public  service. 
The  amount  of  debt  to  be  contracted  will  stand  as  follows :  At 
the  end  of  the  year 

1838 $  4,000,000 

1839 8,000,000 

1840 12,000,000 

1841 16,000,000 

1842 20,000,000 

1843 24,000,000 

1844 28,000,000 

1845 32,000,000 

1846 36,000,000 

1847 40,000,000 

2.  It  may  be  presumed,  that  the  loans  of  the  respective  years, 
being  in  instalments,  as  the  public  service  during  the  year  may 
require,  the  interest  on  the  loan  of  any  one  year  will  not  be  pay- 
able for  more  than  six  months  of  the  year  in  which  it  is  con- 
tracted. 

3.  Such  moneys  may  be  borrowed  on  five  per  cent,  stock,  not 
under  par,  and  redeemable  at  the  option  of  the  government  after 
10  or  15  years. 

4.  The  annual  surpluses  of  income  may  form  a  sinking  fund, 
and  invested  in  State  stock  or  loaned  to  our  citizens,  so  as  to 
produce  at  least  five  per  cent,  per  annum  upon  their  principals. 


The  following  table  is  prepared,  and  exhibits  the  revenue  pay- 
able in  each  year  ;  the  interest  to  be  provided  for  in  each  year ; 
the  surplus  revenue  going  to  the  sinking  fund  in  each  year;  and 
the  nett  amount  of  the  sinking  fund  at  the  end  of  each  year;  and 
the  period  at  which  the  sinking  fund  will  suffice  to  pay  off  and 
reimburse  the  whole  principal  and  interest  of  the  debt. 


1.  The  nett  revenue  in 
each  year  will  be  for 


18-38 

$800,000 

18:^9 

900,000 

1840 

1,000,000 

1841 

1,100,000 

1842 

1, -200,000 

1843 

1,4(  0,000 

1844 

1,600,000 

1845 

1,800,000 

1846 

2,100  000 

1847 

2,400,000 

1848 

2,700,000 

1849 

3,000,000 

1850 

3,000,000 

1851 

3,000,000 

1852 

3,000,000 

1853 

3,000,000 

1854 

3,000,000 

1855 

3,000,000 

1856 

3,000,000 

1857 

3,000,000 

1858 

3,000,000 

J  859 

3,000,000 

1860 

3,(;oj,ooo 

1861 

3,000,000 

1862 

3,000,(;00 

1863 

3,000,000 

1864 

3,000,000 

1865 

3,000,000 

2.  The  interest!  3.  The  surplus  going 
to  be  ]):iid  in  each  to  the  sinking  fund  will 
year  will  be  he  for  each  year 


$100,000 
3u0,000 
500,000 
700,000 
900,000 
1,100,000 
1,300,000 
1.501  »,000 
1,700,000 
1,900,000 
2,000,000 
2,001  ),000 
2,000,000 
2,000,000 
2,000,000 
2,000,000 
2,000,000 
2,000,000 
2,000,000 
2,000,000 
2,000,000 
2,000,000 

2,(;oo,ooo 

2,000,000 
2,000,000 
2,000,000 
2,000,000 
2,000,000 


4.  The  amount  of 
the  sinking  fund  at 
the  end  of  each  year 


$700,000  00 
635,000  00 
566,750  00 
495,087  50 
419,841  57 
440,833  06 
362,855  66 

480.018  44 

615.019  37 
745,770  34 
983,058  05 

1,322,211  79 
1,388,322  38 
1,457,738  50 
1,530,625  43 
1,607,156  70 
1,607,514  53 
1,771,890  26 
1,860,484  77 
1,953,509  01 
2,051,184  46 
2,153,793  74 
2,261,483  42 
2,374,557  58 
2,193.285  47 
2,617,949  75 
2,748,847  23 
2,836,277  10 


$700,000  00 

1,335,000  00 

1,901,750  00 

2,396,837  50 

2,81(),():9  37 

3,257,513  33 

3,620,368  99 

4,100,387  43 

4,715,406  80 

5,461,177  14 

6,444,235  99 

7,766,447  78 

9,154,770  16 

10,612,505  66 

12,143.134  09 

13,750,-390  79 

15,437,805  32 

17,209,695  58 

19,070,180  35 

21,023,689  36 

23,075,874  82 

25,229,668  56 

27,491,151  98 

29,865,709  57 

32,358,995  04 

34,976,944  79 

37,725,542  02 

40,611,819  12 


Showing  the  final  reimbursement  of  the  whole  debt  in  the  year  1865. 


N-  B. — If  the  stock  shall  be  negotiated  at  a  lower  rate  than 
five  per  cent.,  or  if  five  per  cent,  stocks  shall  command  a  pre- 
mium, this  result  will  be  correspondingly  hastened. 


REMARKS. 


If  the  revenue  assumed  is  not  overrated,  and  it  is  believed 
that,  for  the  average  of  time,  it  is  greatly  underrated,  the  State 
has  an  ample  provision  made  for  the  punctual  payment  of  the 
interest,  and  the  final  discharge  of  the  principal  of  a  debt  of  forty 
millions  of  dollars. 

Variations  in  the  revenue  received,  or  in  the  interest  realized 
on  the  sinking  fund,  may  expedite  or  postpone  the  final  discharge 
of  the  debt  for  a  very  few  years.  But  its  sure  and  final  extin- 
guishment by  the  means  provided  may  be  regarded  as  certain. 

SAMUEL  B.  RUGGLES, 
V.  BIRDSEYE, 
THOS.  B.  COOKE, 
ABNER  LEWIS, 

Committee  of  Ways  and  Means. 


1 


The  following  tables,  compiled  from  public  documents,  are 
published  with  the  preceding  Report,  for  the  purpose  of  exhibit- 
ing the  progressive  increase  during  a  series  of  twenty  years,  in 
the  official  valuations  of  the  taxable  property  in  the  city  and  in 
the  State  of  New  York  respectively. 

They  embrace  the  two  periods  of  ten  years  each,  one  imme- 
diately preceding,  and  the  other  immediately  following  the  com- 
pletion of  the  Erie  Canal,  in  the  year  1825. 

1.  Official  valuation  of  the  real  and  personal  property  of  the 
city  of  New  York,  from  1815  to  1825,  inclusive. 


Year. 

Real  Property. 

Personal  Property. 

Total. 

1815 

$57,000,000 

$24,636,042 

$81,636,042 

1816 

57,308,200 

24,766,000 

82,074,200 

1817 

57,799,435 

20,996,200 

78,895,735 

1818 

59,827,285 

20,426,806 

80,254,091 

1819 

(i(),500,295 

18,612,766 

79,113,061 

1820 

52,084,328 

17,446,425 

69,530,753 

1821 

50,(il9,720 

17,665,350 

68,'<J85,070 

1822 

53,330,574 

17,958,570 

71,289,144 

1823 

50,184,229 

20,756,591 

70,940,820 

1824 

52,019,730 

31,055,946 

83,075,676 

1825 

58,425,895 

42,734,151 

101,160,040 

2.  The  like  from  1825  to  1835,  inclusive. 


Year. 

Real  Property. 

Personal  Property. 

Total. 

1825 

$58,425,895 

$42,734,151 

$101,160,046 

1826 

64,912,850 

42,534,931 

107,447,781 

1827 

72,617,770 

39,594,156 

112,211,926 

1828 

77,139,880 

36,879,653 

114,019,533 

1829 

76,834,880 

35,691,136 

112,526,016 

1830 

87,603,580 

37,684,938 

125,288,518 

1831 

97,221,870 

42,058,344 

139,280,214 

1832 

104,042,405 

42,260,213 

146,302,618 

1833 

114,124,566 

52,366,976 

166,491,542 

1834 

123,249,280 

63,299,231 

186,.548,511 

1835 

143,732,425 

74,991,278 

218,723,703 

Increase  in  the  valuation  of  the  real  and  personal 


estate  of  the  city,  from  1815  to  1824, 
Increase  from  1824  to  1835, 


$1,439,634 
$135,648,027 


TL   obli£^ 


6 


3.  Official  valuation  of  the  real  and  personal  estate  of  the 
State  of  New  York,  from  1815  to  1825,  inclusive. 


Year. 

Keal  Property. 

Personal  Property. 

Total. 

1815 

$239,667,218 

$41,587,905 

$281,255,123 

1816 

250,182,474 

40,680,034 

290,862,508 

1817 

265,710,214 

38,457,247 

304,167,461 

1618 

271,721,102 

37,611,638 

309,332,740 

1819 

243,942,231 

37,054,513 

280,996,744 

1820 

222,148,966 

33,403,379 

255,552,365 

1821 

207,446,531 

33,199,982 

240,646,513 

1822 

198,439,210 

32,864,290 

231,303,500 

1823 

215,238,913 

46,903,723 

252,142,636 

1824 

211,577,310 

57,908,315 

269,465,625 

1825 

199,5:33,471 

63,893,875 

263,427,346 

4.  The  like  from  1825  to  1835,  inclusive. 


Year. 


1825 

1826 
1827 
1828 
1829 
1830 
1831 
1832 
1833 
1834 
1835 


Real  Property. 


$199,533,471 
214,802,204 
238,430,138 
275,861,471 
23V47,84l 
250,975,685 
271,053,169 
294,596,149 
Returns  incomplete 
347,(108,841 
403,517,585 


Personal  Property. 


$63,893,875 
64,590,093 
65,823,565 
68,785,292 
70,794,638 
68,142,411 
70,801,274 
75,956,259 

118,849,137 
125,058,794 


Total. 


$263,427,346 
279,392,297 
304,253,723 
344,646,763 
309,542,479 
319,118,296 
341,654,443 
370,552,408 

466,457,978 
528,576,379 


Decrease  in  the  valuation  of  the  real  and  personal 
property  of  the  State,  in  the  ten  years  next  pre- 
ceding 1825, $17,827,777 

Increase  in  the  ten  years  next  subsequent,  .         .  $265,149,033 


iliiil 


mm^  ««; 


B.  :'^  ::B\  ■■;^l!  i'Mi 


;1  if  K 


3. 

Statel 

Year.l 


-^■li,-. 


1815' 

1816 

1817 

1818' 

1819 

1820 

1821 

1822] 

182'c 

182^ 

182S 


4.  Ti 


1825 

182(3 
1827 
1828 
1829 
1830 
1831 
1832 
1833 
1834 
1835 


Decrease] 
properti 
ceding 

Increase  i\ 


'-'  y 


